The decks were cleared for
the Tamil Nadu government to acquire the five per cent stake proposed to be
divested in Neyveli Lignite Corporation (NLC), a move ending the month-long
stalemate over the process and protests by the central PSU workforce. The way
for the State to purchase the shares was paved following discussions in Mumbai
among officials from Tamil Nadu, led by Mr. K. Shanmugam, Principal Secretary
(Finance), and those of the Centre and Securities and Exchange Board of India
(SEBI).
Announcing this, Chief
Minister Jayalalithaa, in a statement, said five State PSUs, whose eligibility
was discussed earlier at a meeting in New
Delhi
While agreeing to her
suggestion for divesting the stake in favour of the State PSUs, the Centre,
however, struck to its position of offloading five per cent in NLC. Ms. Jayalalithaa
had, in one of her letters on the issue to Prime Minister Manmohan Singh,
pointed out that since public holding in NLC was already 6.44%, it would be
sufficient if 3.56% was divested.
The disinvestment, construed
by political parties in the State, including Dravida Munnetra Kazhagam, an
erstwhile ally of the Congress, and workforce of the central PSUs as a
privatisation move, was necessitated by the minimum public holding norms. Dr.
Singh had cited the Securities Contract (Regulation) Rules, 1957, in this
regard and underscored the need to comply with them by August 8. While the
minimum public shareholding norm for private firms is 25 per cent, for PSUs it
is 10 per cent.
At the meeting earlier, the
State government proposed that the Tamil Nadu Industrial Development
Corporation (TIDCO) be given 25% of the NLC stake to be offloaded; State
Industries Promotion Corporation of Tamil Nadu (SIPCOT) 45%; Tamil Nadu
Industrial Investment Corporation (TIIC), Power Finance & Infrastructure
Development Corporation Ltd (Powerfin) and Tamil Nadu Urban Finance &
Infrastructure Development Corporation Ltd (TUFIDCO) 10% each.
Ms. Jayalalithaa said the
State government team had suggested at the meeting that the share sale price be
arrived at taking into consideration the average price at which the NLC scrip
was traded in the earlier weeks.
ROAD TO DISINVESTMENT
|
|
June 21, 2013
|
Cabinet clears sale of Centre’s 5% stake in Public
Sector unit NLC
|
June 25, 2013
|
Tamil Nadu Chief Minister writes to Prime Minister,
says TN govt is willing to buy Centre’s stake
|
July 01, 2013
|
Centre says it is open to TN’s offer
|
July 02, 2013
|
Nearly 30, 000 NLC workers go on strike
|
July 07, 2013
|
SEBI gives nod to TN’s proposal, but asks State
Government to send a concrete plan
|
July 15, 2013
|
NLC stake sale to Tamil Nadu is cleared; Tamil Nadu
government to buy 5% stake for Rs. 500 crore
|
The route of Institutional
Placement Programme (IPP) was adopted in respect of sale of five per cent
equity in the Neyveli Lignite Corporation (NLC) as opposed to the Union
government’s original scheme of selling the NLC shares through Offer for Sale
(OFS) mechanism to the public.
Jayalalithaa thanks Manmohan:- Chief Minister Jayalalithaa
thanked Prime Minister Manmohan Singh for his support in getting five Tamil
Nadu public sector undertakings the five per cent stake in NLC. According to an
official release, Ms. Jayalalithaa spoke to Dr. Singh over phone and told him
that his intervention led to a satisfactory agreement at the meeting of
officials from Tamil Nadu and those of the Centre and SEBI in Mumbai. Dr. Singh,
the release said, appreciated and thanked Ms. Jayalalithaa for the efforts she
took to resolve the issue. The Prime Minister said he was for cordial relations
with State governments.
Employees and contract
workmen of the Neyveli Lignite Corporation called off their 13-day long strike
and rushed to their work spots the moment they heard the news that the State
government had clinched the deal with the Securities and Exchange Board of
India on the purchase of 5 per cent of NLC shares.
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