Uncertainty over the future of Illawarra-based Gujarat NRE Coking Coal appears to be having a ripple effect on its Indian parent company, with media in India reporting on a volatile share price for the overseas firm.
According to the Indian Economic Times, the share price for Gujarat NRE Coke – of which Gujarat NRE Coking Coal is a subsidiary – slipped more than 5 per cent on Monday, then bounced back on Tuesday to close at 13 Indian rupees (about 22¢). This was significantly down from the January high of 22.65 rupees (39¢).
The Times attributed these fluctuations to financial trouble and problems with the Australian company’s annual report, in which auditors Grant Thornton refused to give an opinion because of doubts over the company’s ability to survive the next 12 months, and inadequate information about its ability to repay debts.
Meanwhile, the Australian Federal Court has ordered Gujarat NRE Coke and its chairman, Arun Jagatramka, to repay $9.1 million plus interest and court costs to a Singaporean company.
On Monday, the court dismissed an appeal by Gujarat and Mr Jagatramka over a failed 2011 coal deal with Coeclerici Asia, in which the Indian company was contracted to sell 40,000 metric tonnes of coke to the Singapore corporation within the first three months of last year.
Coeclerici gave the company $US10 million ($10.7 million) as a prepayment, on the proviso that Gujarat would repay the money, along with $US750,000 in damages, if the coal was not delivered.
But shortly after the contract was made, the companies could not agree on a price for the coal, so Gujarat did not deliver it, causing Coeclerici to demand its prepayment back.
In August this year, Gujarat NRE Coke was ordered to repay $US8.5 million to Coeclerici, along with nearly $US305,000 in interest and £12,232.85 in arbitration costs after the Indian miner failed to provide thousands of tonnes of coal. Gujarat Coke and Mr Jagatramka appealed on the basis the primary judge had made an error, because they had not given a reasonable chance to present their case.
However, the three federal court judges dismissed this appeal on Monday, saying the previous judge had not breached any rules of natural justice.