CPM doesn't subscribe to BSNL issue

NEW DELHI: As expected, the CPM on Tuesday hit out at the BSNL’s plans to offload 10% of its stake. The party has asked the government to desist from any move to divest the company’s shares and dismissed as “baseless” the argument that funds were needed for the company’s development and expansion.

The BSNL had on Monday announced plans to launch an IPO for raising around Rs 40,000 crore. Though the company executives said that it would not be a disinvestment but a dilution of stake by the government through the issue of fresh shares, the CPM polit bureau issued a statement saying it will oppose the “disinvestment” proposal.

Earlier, the Left had forced the government to put its plans to divest Bhel shares on the back burner. The CPM said the BSNL was already disadvantaged due to problems created for its acquisition of GSM lines and other measures needed to meet the competition from private operators.

“The reason given for disinvestment is that funds are required for the development and expansion of the BSNL. This is baseless as the BSNL has Rs 4,000 crore surplus which can be used for this purpose,” it said.

The party also said such a move would be “detrimental to the BSNL and public interests”. The Left’s “no disinvestment of profit-making public sector companies” could cause hurdles for the government, which is likely to take a final call on the BSNL IPO soon.

The Left, which had dilly-dallied on the issue of divesting small shares in profit-making PSUs, had revived its blanket opposition to disinvestment following resistance from within. Left-backed trade unions, Citu and Aituc, had refused to back the CPM and CPI leadership on considering case-by-case divestment of small shares.

The $100-billion PSU has an equity base of Rs 5,000 crore, which translates to a shareholding structure of 500 crore shares at a face value of Rs 10 each. If the BSNL manages to raise Rs 40,000 crore by selling a 10%, it would value the company at a whopping Rs 4,00,000 crore. The Vajpayee regime had offered a free hand to the boards of BSNL in the decision-making on IPO.