Kerala to scrutinise Adani-MSC Vizhinjam stake deal for security, monopoly concerns: CM Satheesan

Kerala Chief Minister V D Satheesan on Wednesday said the state government will closely examine the proposed transfer of a 49 per cent stake in Adani Vizhinjam Port Private Limited (AVPPL), the concessionaire for Vizhinjam port, to Switzerland-based MSC, saying there can be no ownership change without the state's prior approval.

Replying to a special submission by Leader of the Opposition Pinarayi Vijayan in the Assembly, Satheesan said the government had learnt about the proposed transaction only through media reports and had not received any formal communication from Adani Ports and Special Economic Zone (APSEZ).

On Tuesday, Adani Ports and Special Economic Zone (APSEZ) announced that Mediterranean Shipping Company (MSC), the world's largest shipping and logistics group, would acquire a 49% stake in AVPPL for about $1.4 billion.

Earlier in the day, when the matter was raised by a member during Question Hour, Satheesan said there had been media reports regarding the proposed stake transfer, but the company had not approached the government seeking approval.

In his detailed reply to the Opposition leader's special submission, Satheesan said Adani Ports has not communicated anything to the Kerala Government regarding this matter.

“No letter or information has been given to the Government," he said.

Quoting Clause 5.3 of the concession agreement, the chief minister said, "The concessionaire shall not undertake or permit any change in ownership without the prior approval of the Authority.' The Authority is the Government of Kerala." He said the Companies Act treats the transfer of more than 25% equity as a change in ownership and such a move cannot happen without the state's approval. The proposal, he added, has not yet come before the government.

"When it comes, we will examine it," Satheesan said, adding that the government would evaluate five key aspects before taking a decision -- national security, public interest, fair competition, investment and the port's long-term development.

He said approvals from the Union Ministry of Shipping and the Union Ministry of Home Affairs would also be required because Vizhinjam is a strategically important asset.

"The most important issue we must pay attention to is that there should be a common user facility... There must not be a monopoly where only one company has exclusive access," he said.

Satheesan said the government would ensure that the port remains accessible on a non-discriminatory basis to all shipping lines, vessel operators, exporters, importers, freight forwarders and other stakeholders.

"I am not saying that this is an alarming situation. What I am saying is that the most important issue we must pay attention to is that there should be a common user facility there. It must be a competitive user facility that is available to everyone.

"There must not be a monopoly where only one company has exclusive access. This company should not be allowed to establish a monopoly over the common user facility. It is the responsibility of the state government to ensure that such a monopoly does not arise," Satheesan said.

He said the facility must be available on a non-discriminatory basis to everyone who uses the port shipping lines, vessel operators, shippers, consignees, freight forwarders and all other stakeholders.

"There must be a common facility that everyone can use. It must remain a common user facility and should not become the exclusive preserve of one company," Satheesan said.

The chief minister noted that MSC is not merely a financial investor but also one of the world's largest container shipping companies and a major operator of container terminal facilities. "Therefore, we must carefully examine how they intend to use this facility," he said.

Earlier, Vijayan welcomed the chief minister's clarification that no approval had been granted but urged the government to examine the proposal carefully.

"When I saw the news reports, I doubted as to whether the state government was also aware of it... The Chief Minister's clarification has addressed that concern," he said.

The opposition leader said the concession agreement required the proposal to be examined from the perspective of national security and the larger public interest.

Referring to the Union government's treatment of Vizhinjam as critical infrastructure during the Pahalgam attack and Operation Sindoor, he said security considerations could not be ignored.

Vijayan also raised concerns over the commercial impact of the proposed deal, arguing that MSC is not merely an investor but one of the world's largest shipping companies.

"If that shipping company also becomes a joint owner with the concessionaire, which is the port operator, then a new form of monopoly will be established here," he said.

He warned that exporters from Kerala could be forced to depend on a single company's vessels and containers, allowing it to dictate freight rates. Such a monopoly, he said, could undermine competition, affect port-based industries and discourage investments planned by other logistics firms.

Vijayan also expressed concern that the arrangement could affect the state's long-term revenue interests as Kerala holds a stake in the project.

APSEZ has described the $2.85-billion valuation as the largest foreign private investment in Indian port infrastructure and said the partnership would strengthen Vizhinjam's position as a major transshipment hub in the Indian Ocean.