Chief Minister Siddaramaiah on Thursday stepped in to argue against the Union government’s strategic stake sale in the public sector defence company BEML Ltd.
In a letter dated September 28, Mr. Siddaramaiah urged the Prime Minister not to sell 26% of government stake to a strategic buyer as planned over a year ago. The move could undermine national security, among others, he said.
“I urge you to kindly review the decision to disinvest [in] BEML and let it continue as a CPSE,” the letter said.
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Ever since the Centre last November announced its disinvestment wish list, which includes the Bengaluru-headquartered BEML, the company’s employees have been opposing the move; it will transfer the management control to a future investor from the private sector, leaving the government with 28% share. BEML is among 20 PSUs identified by the NITI Aayog for disinvestment.
Mr. Siddaramaiah urged the Prime Minister, “Ï would like to draw your attention to the budget speech of 1999-2000 of the then NDA government, wherein a commitment has been made to Parliament that ‘the government shall not divert strategic CPSEs and the disinvestment will be limited to non-strategic CPSEs’.”
Disinvestment in a strategic and profit-making Union government enterprise would only be a windfall for the private sector investor, which would reap its profit at public cost.
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“It is likely to undermine the security of the country,” the letter argued. Retaining it in the public sector had more advantages than a stake sale.
After two public issues, the last one in 2007, the Centre owns 54 per cent share in the company. For 2017-18, BEML made a turnover of over ₹2,836 crore and a post-tax profit of around ₹72 crore.
BEML manufactures important land systems for the Army, besides rail and metro coaches and mining equipment.
Heavy trucks, bridge systems, missile firing support vehicle are its mainstay products. Its nine units employ 8,000 people across the country.
In July, the government gave an ‘in-principle’ approval to divest 26% stake in favour of a strategic buyer, who would hold management control over it. It said it had appointed a transaction adviser, a legal adviser and an asset valuer. The process would go for specific approval again, it said.