Padmaparna Ghosh, Livemint, May 15, 2008
New Delhi: A few shareholders of Dow Chemical Co. have complained to the US market regulator that the company did not disclose the risks to its investments in India due to the pending issues related to the former Union Carbide facility in Bhopal.
In their complaint, a copy of which is available with ‘Mint’, an institutional investor and eight other shareholders have asked the Securities and Exchange Commission to investigate and take appropriate enforcement action for the “dramatic, undisclosed information” related to Dow’s potential liabilities in India.
A gas leakage from the Union Carbide facility in 1984 had killed thousands of people. Dow Chemical, which acquired Union Carbide later, is facing demands from several quarters to compensate the affected people and pay for environmental damages.
India’s department of chemicals and petrochemicals had filed an application before the Madhya Pradesh high court, seeking Rs100 crore from Dow Chemical for environmental remediation at the Bhopal site.
“Dow Chemical has not notified shareholders of this pending application for remedial funds; most significantly, the company has never indicated in its shareholder reports that these remaining liability issues are an impediment to investing in India,” the complaint said.
Quoting documents from the Prime Minister’s Office, the complaint added that Dow Chemical’s $1 billion (Rs4,240 crore) in proposed investment may be at issue due to the failure to resolve the Bhopal issue.
Currently, Dow Chemical is in the process of investing Rs300 crore for a research and development facility in Pune and another Rs600 crore for a plant in Dahej along with Gujarat Alkalies and Chemicals Ltd.