Sutirtha Bhattacharya, the newly appointed chairman and managing director (CMD) of Coal India, has one less reason to worry about when he assumes office now that the London-based The Children's Investment Fund Management LLP (TCI) has withdrawn all legal cases against the world's single largest coal miner.
Pulling the curtain over the hedge fund's first attempt in India to influence operations of a government-owned enterprise in a way is similar to what it tried with moderate success in a few countries like Japan and UK.
TCI Cyprus Holding's legal tussle with Coal India over charges of mismanagement and ignoring shareholders' interest starting in 2012 took a nasty turn with the case filed in Calcutta High Court fizzling out later.
The activist, with an enviable track record in terms of return to investors, progressively lost interest y divesting its majority shareholding in the company which once stood at 1.35% in 2012 to negligible levels. "In fact the company has almost exited from CIL," said a source familiar with the developments.
And now the maverick billionaire Christopher Hohn-promoted hedge fund has withdrawn the case at the Calcutta High Court.
"Counsel appearing on behalf of the plaintiff, submits that the plaintiff is not willing to proceed with the suit. In view there of, CS No.349 of 2012 stands dismissed as withdrawn," Judge Soumen Sen said in his order dated December 18 on the case TCI Cyprus Holdings Ltd versus Coal India and others.
Another similar cased filed at the Delhi High Court has also been withdrawn too, sources said.
The reason for the withdrawal, which TCI had fought with all earnestness till 2013, wasn't disclosed though.
A mail query sent by dna to Oscar Veldhuijzen, partner and TCI's public face in India remained unanswered.
But the reasons have become apparent to those tracking the case and how TCI persued its agenda.
At the height of its struggle against alleged lack of responsibility of Coal India management and Indian government towards shareholders, TCI fought on multiple fronts, setting up a website coal4india.com posting all its communications and inviting public comments even as it dragged the company including its directors to courts in Kolkata and Delhi.
But after going for country's first class action suit in November 2012, its zeal started waning beginning sometime in March 2013 when it started selling its holdings in Coal India.
The last showdown between the two took place during an earnings call in August 2013 between Oscar and Coal India management where the latter stonewalled most of TCI's charges like low coal prices with a reply that the corporation being government owned has a duty to serve the interest of the nation as a whole.
Despite the disappointment in India, elsewhere globally, TCI claims to have forced the Japanese government to bring down holdings in Japan Tobacco from 51% to 33% and simultaneously raise payout.
TCI abandoning its case against Coal India might indicate its failure to fundamentally alter the way Indian government runs its companies.
But it could also have been triggered by a more personal reason for Christopher Hohn, who separated from his wife Jamie Cooper last year thereby cutting off substantial sharing of his hedge fund profits with Children's Investment Fund Foundation which she manages.
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