Mines minster against Nalco sale

Jun 25, 2010 - AGE CORRESPONDENT |

New Delhi

Mines minister, Mr B. K. Handique, on Thursday said his ministry is not looking at divestment in Nalco, and said that he has already written to the finance ministry on this matter.
The minister was of the view that since the company had sufficient funds there was no need to sell further stake in it. He said that even the employees, management and local MPs were against further divestment in the PSU.
“Its hands are full. It is doing big projects. It has the requisite money,” said Mr Handique. Currently, government holds 87.15 per cent stake in Nalco.
The mines minister had earlier rejected a proposal of the disinvestment department for 10 per cent follow-on-offer (FPO) in Nalco. He thus becomes the second minister after Mr Sriprakash Jaiswal, the coal minister, to reject the 25 per cent public shareholding in public listed companies.
According to sources the reluctance of these two ministries to sell a large stake in the company may be due to resistance from the strong local unions, who can create problems.
These unions are afraid that large stake sales in PSUs will ultimately lead to privatisation of these companies. In fact, a section of trade unions in Coal India only allowed the IPO of the PSU on assurance that there is no move to privatise it. Their approval was won after convincing them that 10 per cent of the IPO was necessary for it to maintain the Navratna status of the company.
There are around 35 listed PSUs where public shareholding is less than 25 per cent, according to SMC capital.

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