Jaya against more divestment in Neyveli Lignite, writes to PM

Chennai: Opposing government’s moves to disinvest an additional five percent stake in the Neyveli Lignite Corporation, Chief Minister Jayalalithaa today warned the Centre that any such proposal would lead to “labour unrest” disrupting power supply to the State.

In a letter to Prime Minister Manmohan Singh, Jayalalithaa said any proposal to disinvest even a small portion of the shareholding would lead to “considerable labour unrest”.

“Given the current acute power shortage in the State, any disruption of power supply from NLC would very adversely affect the interest of the state. Hence, I strongly urge you to explore (other) alternatives to the proposed investment,” she said.

Noting that NLC employees have “justifiable apprehension” on disinvestment even a “portion” of Government equity, she said, “Instead of reassuring the large workforce, the concerned Ministry and the company management seem to be trying to justify the disinvestment based on specious and artificial regulatory requirements.”

Jayalalithaa said her government has been strongly opposed to privatising any portion of NLC and was of the view that the public sector character of NLC should be maintained without any dilution.

Listing the possibilities available for government in the matter, she said it was incorrect to state that there was no option to disinvesting a further five percent stake.

“NLC can be delisted by buying back the 6.44 percent currently in public hands through the buy back mechanism available under SEBI regulations. Alternatively, Securities Contracts (Regulation) Rules, 1957, can be amended to make a special exemption for NLC by introducing a necessary provision under Rule 19(2)(c),” she said.

Observing that NLC is the largest public sector unit in Tamil Nadu, she said it was also the largest Central power producer located in a backward region of the state providing employment to more than 17,500 persons.

She urged Singh to take necessary action to ensure there was no further disinvestment or dilution of the share holding of the government of India in NLC.

PTI