Chennai, 14 July
In an effort to bring early resolution of the labour unrest in Neyveli, a Tamil Nadu government team will meet officials of the Centre and the Securities and Exchange Board of India (Sebi) in Mumbai tomorrow.
They will discuss and finalise modalities for the state to acquire the proposed five per cent stake in Neyveli Lignite Corporation (NLC). Stating that the details of the structure and execution of the transaction would be finalised in this meeting, chief minister Miss J Jayalalithaa expressed confidence that this would be a positive development, which would enable an early resolution of the labour unrest in Neyveli.
Miss Jayalalithaa on Saturday had said it would be enough to offload just 3.56 per cent equity from the Navaratna PSU to meet the regulatory norm of 10 per cent public holding since already 6.44 per cent stake is being held by the public.
In a reply to Prime Minister Mr Manmohan Singh’s 12 July letter, Miss Jayalalithaa recalled that in her earlier missive on 7 July, she had mentioned the 3.56 per cent figure.
She said the Tamil Nadu team, headed by finance secretary K Shanmugam, appointed as the nodal officer for finalising the transaction, had already held detailed discussions with the secretary, disinvestment department, on 10 July in New Delhi.
Various modalities of the disinvestment, including identification of the state PSUs that are qualified institutional buyers (QIBs) and eligible to participate in an institutional placement programme (IPP), the appropriate manner of drafting the eligibility criteria in the offer document to ensure that the disinvestment is carried out in favour of these entities, the pricing formula, the timeline for effecting the transaction besides the total quantum of disinvestment to be carried out were discussed during the talks.
The Prime Minister, in his reply to the chief minister’s letter, had agreed to her proposal to buy the five per cent of NLC shares. In his letter, he had said the proposed five per cent disinvestment would neither lead to privatisation nor alter the public sector character of NLC.
"At present, the government of India&’s shareholding is 93.56 per cent and the remaining 6.44 per cent shares are held by others. The public sector character of the company will not be affected at all as long as the government of India continues to hold more than 51 per cent of the shareholding in NLC. The fear that such a disinvestment would lead to privatisation is, therefore, unfounded and devoid of facts," he said.
Employees of NLC are on an indefinite strike against the Centre’s move to divest five per cent of its stake in the PSU. About 30,000 workers, including 13,000 contract employees, are on strike since July demanding that the Centre withdraw its decision to sell its stake as part of disinvestment process.
Earlier Miss Jayalalithaa had also voiced concern that due to this labour unrest the entire south may be affected due to shortage of power.