HZL disinvestment move raises eyebrows

Vedanta, which picked up equity in HZL, closes unit in city

The decision of Central Government to sell residual stake of 29.5 per cent in Hindustan Zinc Limited along with BALCO to complete their 100 per cent disinvestment has raised eyebrows here.

The decision, cleared by the Cabinet Committee on Economic Affairs, has generated heat here as it came close on the heels of Vedanta, which picked up majority equity in HZL during NDA regime, shut down its unit in the city citing pollution, and problems of, among others, raw material and power.

After suspending operations of Zinc Smelter for over a year, the management signed an agreement with Zinc Smelter Mazdoor Sangh on July 31, 2013. It may be recalled that Union Minister of State for Commerce and Industry D. Purandeswari had opposed attempts to sell the government equity in HZL going by the ill-treatment meted out to the workers of Zinc Smelter by the management in a letter addressed to the Prime Minister.

CBI has already filed preliminary inquiry against allegations of irregularities in 26 per cent disinvestment of HZL in 2002. “We want that the assets of HZL should not be tampered with in the city as we consider it (sale of residual stake) was part of a sinister design to pick up majority stake and later use huge assets of the company at Mindi for real estate,” CPI (M) State Secretariat member Ch. Narsinga Rao said.

He said his party would soon file a complaint with the CBI DIG here to probe circumstances leading to the closure of Zinc Smelter. Zinc Smelter and its quarters are spread over 360 acres and, according to a conservative estimate, their value will be around Rs.1,000 crore.

Opponents of disinvestment say HZL has reserves of Rs.21,000 crore and the management would have total control over the funds once it gains 100 per cent equity in the company. HZL earned a profit of Rs.6,899 crore in 2012-13.

The Government of India expects disinvestment of residual stake in HZL and BALCO rake in at least Rs.15,000 crore. These are the first public sector units to go into private hands with 100 per cent disinvestment.

“In view of HZL and BALCO experience, we want to fight lock stock and barrel against offloading 10 per cent equity in Rashtriya Ispat Nigam Limited. In the beginning they will say it is only 10 per cent and but subsequently it will lead to 100 per cent privatisation of the profit-making company,” said AITUC national vice-president D. Adinarayana.