Comments
The Government has asked market regulator, the Securities and Exchange Board of India, to examine Tamil Nadu’s offer to buy 5 per cent stake in Central Government-owned Neyveli Lignite Corporation.
“The suggestion of the Chief Minister of Tamil Nadu regarding divestment of shares of NLC through special arrangements to the Undertakings of Government of Tamil Nadu has been referred to SEBI for examination whether such sale is permitted within the Securities Contracts (Regulation) Rules, 1957,” the Coal Minister, Sriprakash Jaiswal, said on Tuesday.
On June 21, the Cabinet Committee on Economic Affairs decided to divest 5 per cent equity of NLC through an offer-for-sale (OFS). The step to sell shares in the Tamil Nadu-based miner is necessary to meet public shareholding norms for a Navratna company, Finance Minister P. Chidambaran said on that day.
Currently, the Government holds 93.56 per cent in the miner. The stake sale can fetch around Rs 700 crore.
legal view sought
However, the Centre’s move is being strongly opposed by Tamil Nadu Chief Minister, J. Jayalalithaa, and the workers of the company. The Prime Minister Manmohan Singh had earlier written to the Chief Minister explaining the necessity for divesting shares in NLC. The Chief Minister has reportedly written back to Singh, offering to buy 5 per cent stake.
The Department of Disinvestment has sought a legal view on the issue. According to legal opinion, State financial institutions qualify as bidders and can buy stake through OFS, a top Coal Ministry official told Business Line .
Meanwhile, trade unions have given a strike notice, and the matter has been referred for conciliation to the Assistant Labour Commissioner (Central).
“The office bearers and members of all trade unions and associations are requested not to resort to any strike, as the suggestions of Chief Minister of Tamil Nadu are under examination of the Government,” Jaiswal added.
The authorised capital of NLC is Rs 2,000 crore. Of this, the issued and subscribed equity capital was Rs 1,677.71 crore, as on March 31.
This comprises of 167.771 crore equity shares of face value of Rs 10 each. After the disinvestment, the Government of India’s holding in the company would come down to 88.56 per cent.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.