The two leading political parties in the State have time and again opposed the Centre’s plan to divest a small portion of its stake in the public sector Neyveli Lignite Corporation (NLC).
On Thursday, it was the turn of Chief Minister Jayalithaa to oppose the Centre’s proposal to divest five per cent of its stake in NLC, warning that it might lead to labour unrest. The Dravida Munnetra Kazhagam had opposed such a move in 2006.
Currently, the Centre owns 93.56 per cent of the total share capital and the rest is held by the general public and financial institutions. A few years ago, it was decided by the Centre to offload its stake in Navratna companies to at least 10 per cent. While the dilution exercise was completed in most of the companies, it is yet to take place in NLC.
Navratna is a title given to Public Sector Companies by the Centre for having performed well for a period of three years on six identified efficiency parameters. They are accorded greater autonomy to compete in the global market.
In a letter addressed to the Prime Minister Manmohan Singh on Thursday, she said any proposal to divest even a small portion of the share holding will lead to considerable labour unrest. Given the current acute power shortage in the State, any disruption of power supply from NLC would adversely affect the interest of the State.
According to her, the Centre was proposing to divest a further five per cent of its equity holding to meet an artificially placed regulatory requirement under the recently amended Securities Contracts (Regulation) Rules 1957.
She said instead of reassuring the work force of 17,500 persons, the Ministry concerned and the company management tried to justify the divestment based on specious and artificial regulatory requirements. The State government’s co-operation was sought to convince the labour unions to accept the proposed disinvestment. She said the public sector character of NLC should be maintained without any dilution.
“NLC can be delisted by buying back the 6.44 per cent currently in public hands through the buyback mechanism available under SEBI regulations. Alternatively, the Securities Contracts (Regulation) Rules, 1957, can be amended to make a special exemption for NLC,” she said.
While urging Dr. Singh to take necessary action to ensure that there was no further dilution, she sought an early response from the Centre.
Official sources said the dilution exercise had to be completed by July end as other Navratna companies have completed it long back. In some cases, the Centre has diluted up to 30 per cent of its stake.
Till date, the NLC board has not taken any decision on this issue.