Mumbai, Sep 5 (IANS) Energy major Essar Power Wednesday denied any impropriety in its acquisition of Navbharat Power, one of the five companies against whom the CBI has filed an FIR in the coal blocks allocation case.
"Essar Power categorically denies allegations which have been voiced in certain media reports...that Navabharat was a 'front' company of Essar," an Essar statement said here.
"The entire acquisition was carried out in a transparent manner with independent financial and legal advisors assisting the company in the process of acquisition."
Essar Power acquired 100 percent equity of Navabharat Power Pvt. Ltd. in two tranches in July 2010 and April 2011 for a total consideration of around Rs.230 crore.
According to the CBI, the promoters of Navbharat sold their stakes in the company to Essar Power after the coal blocks were allotted to them and in the process, hiked the price of their personal stakes, while devaluing the company's share price.
According to Essar, Navabharat Power, promoted by the Hyderabad-based businessman P. Trivikram Prasad and former CEO of Lanco Power, Y Harish Chandra Prasad, had been allotted a coal block in January 2008, three years before the acquisition by Essar was concluded.
It said the company has had no dealings with either of the original promoters until this transaction.
Essar said the acquisition of Navbharat was in line with the company's power sector strategy and it invested more than Rs.500 crore after acquisition.
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