Australia's Perdaman sues ICICI Bank, claims damages

Last Updated: Thu, Jan 10, 2013 19:51 hrs

Perdaman Chemicals and Fertilisers has accused ICICI Bank of preventing Lanco’s Griffin from supplying coal to its project

Australia’s Perdaman Chemicals and Fertilisers has widened its legal battle against Lanco Infratech by launching a $3.5-billion damage claim against ICICI Bank, the lender to Lanco’s Griffin Coal unit. It accused the bank of preventing Griffin Coal Mining Company from supplying coal to the project.

In 2011, Lanco had acquired Griffin through its Australian subsidiary, Lanco Resources Australia. It borrowed $800 million from a consortium of lenders led by ICICI Bank for this acquisition.

Perdaman, which had originally filed a lawsuit against Griffin, has now widened it to make the bank a party.

Lanco was quick to dismiss these claims. “ICICI Bank has no contractual relationship with Perdaman. The case being referred to currently is the same case that was filed against us in May 2011. We believe it is baseless and will be decided in our favour soon,” the company said in a statement.

“The current attempt of going against ICICI Bank is another desperate attempt of greenmail in frustration. The action, against one of the most reputed institutions of India, will further damage Perdaman’s credibility,” it added.

ICICI Bank did not respond to a mail sent for its comment on the issue.

Lanco said the case against ICICI Bank had not yet been admitted by the court, though news agencies said Perdaman had filed it on January 3 with the federal court in Western Australia.

“Perdaman has almost lost its confidence of winning this case... Their approach on the trial with us has been to delay the process. Lanco is certain to put an end to all of Perdaman’s tactics,” it said.

In December, Lanco had said it had won the case against Perdaman in the supreme court of Western Australia.

“They have no evidence in support of their claim that Lanco breached the coal supply agreement with them. Perdaman claims to be a multinational company but has no business activity in any part of the world. There is no activity even at its coal-to-urea project site. They were supposed to commission this plant at the end of 2015 according to their coal supply agreement with Lanco,” Nagaprasad Kandimalla, CEO for business development at Lanco Infratech, told Business Standard.

ICICI Bank’s shares fell two per cent from its day’s high but recouped some of its losses to close 0.2 per cent down at Rs 1,178.50 on NSE.

Shares of Lanco Infratech shed 1.7 per cent in the day’s trade.

Analysts did not expect Perdaman's claims to have any material impact on ICICI Bank. "Don't think it has any material impact. (Perdaman) seems desperate to draw the lender into the case," an analyst with Bank of America Merrill Lynch said in his note to clients.

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