Centre open to Tamil Nadu government offer on Neyveli disinvestment

NEW DELHI: The Centre will consider Tamil Nadu government's offer to buy 5 per cent shares of the proposed disinvestment of public sector Neyevli Lignite Corporation and sought to assuage employees' concerns, saying there will be no change in management or staff policies.

"I have read about it (Tamil Nadu government's offer) in the newspapers. I have not seen the letter (written by Chief Minister Jayalalithaa)," Finance Minister P Chidambaram told PTI today.

"The letter, I believe, is addressed to the Prime Minister. The copy of the letter has not come to me but assuming that is what the letter says, I will ask the Capital Markets division to quickly consult Sebi whether that would amount to compliance with the Sebi regulations," he said.

He was responding to a question on whether the Centre would consider Jayalalithaa's offer to buy central government's five per cent stake in the lignite producer, which the government had offered to offload to meet Sebi's listing norms.

"We have an open mind. We are disinvesting in Neyveli only for one reason, mainly to comply with the Sebi regulations. If there is an another way to comply with Sebi regulation why should I shut my mind to that. I am willing to consider that option but I will have to consult Sebi," Chidambaram said.
Asked about workers' threat to go on strike against the disinvestment, Chidambaram said, "But why should they go on strike. There is a suggestion (of the Tamil Nadu government), we have not rejected it. We will consider it (and) if that's a feasible suggestion we will accept it."

"Be that as it may, what is the reason for a strike," he asked.

The state-run company had last week said its recognised and registered unions have threatened to go on indefinite strike against the decision.

"We are complying with the law. How can you say that the government should not comply with the law?...even after disinvestment, 89 per cent of the shares of Neyveli Lignite will be held by the Government of India and the remain bulk of it will be held by some public sector institution LIC, GIC, etc. So the character of NLC (Neyveli Lignite) as public sector navratna does not chance," the Finance Minister said.

"Will it affect production? No. Will it affect profitability? No. Would it affect the terms and conditions of employment?," he said.

The Tamil-Nadu headquartered firm is facing stiff protests over the disinvestment decision and 17 trade unions representing its 17,000 employees have already announced they would go on indefinite strike from the midnight of July three till the decision of disinvestment is withdrawn.

The Cabinet had last month cleared sale of 7.8 crore share, or 5 per cent of government's stake through an offer of sale in NLC to raise around Rs 466 crore at current prices.

Jayalalithaa had urged the Centre to reconsider the decision to disinvest shares in NLC and wrote to Prime Minister Manmohan Singh saying it would lead to labour unrest and disruption of power supply from Neyveli.

SEBI has set a deadline of August 2013 for all listed central public sector units to have a minimum 10 per cent public shareholding.

Jayalalithaa had suggested delisting of Neyveli Lignite or amending the Securities Contracts (Regulation) Rules, 1957, to make a special exemption for the company from the minimum public shareholding rule.