Jayalalithaa opposes Centre's proposal to disinvest further 5% from NLC

CHENNAI: Tamil Nadu chief minister J Jayalalithaa on Thursday urged Prime Minister Manmohan Singh to take necessary action to ensure that there is no further disinvestment or dilution of the share holding of the Centre in Neyveli Lignite Corporation (NLC) based in Cuddalore district in northern Tamil Nadu.
"Any proposal to disinvest even a small portion of the share holding will lead to considerable labour unrest.Given the current acute power shortage in the state, it would adversely affect the state's interests. Hence I strongly urge you to explore alternatives to the proposed disinvestment proposal," she said in a letter to the PM.
Pointing out that there is a proposal to disinvest a further five percent of Government of India’s equity holding in NLC in order to meet an artificially placed regulatory requirement under the recently amended Securities Contracts (Regulation) Rules 1957, the chief minister claimed it was incorrect to state that there was no other option to this.
"There are clearly two options. NLC can be delisted by buying back the 6.44% currently in public hands through the buy back mechanism available under SEBI regulations", she suggested."Alternatively, the Securities Contracts (Regulation) Rules, 1957, can be amended to make a special exemption for NLC by introducing a necessary proviso under Rule 19(2)(c)", Jayalalithaa said.
Stating that the employees of NLC have a justifiable apprehension regarding any move to disinvest even a portion of Government of India’s equity in the company, she said, "Instead of reassuring the large work force, the ministry concerned and the company management seem to be trying to justify the disinvestment based on specious and artificial regulatory requirements".
The CM said the state government’s co-operation is being sought to convince the labour unions to accept the proposed disinvestment. "My Government has been consistently and strongly opposed to privatising any portion of the NLC and we are of the firm view that the public sector character of NLC should be maintained without any dilution", she said.