Chennai, June 25 (IANS) Tamil Nadu Chief Minister J. Jayalalithaa Tuesday suggested to the central government that it can divest five percent stake in mining-cum-power generation company Neyveli Lignite Corp Ltd (NLC) to state government undertakings.
In a letter to Prime Minister Manmohan Singh, the text of which was released to the media here, Jayalalithaa said the solution to the opposition to the central government's move to divest five percent stake in NLC needed an unconventional and pragmatic solution.
"I propose that the five percent Government of India's shareholding in Neyveli Lignite Corporation be offered to one or more of Government of Tamil Nadu's State Public Sector Undertakings, such as the Tamil Nadu Industrial Development Corporation, State Industries Promotion Corporation of Tamil Nadu and Tamil Nadu Industrial Investment Corporation," she said.
According to her, such entities fall within the meaning of "public" as defined under Rule 2(d) of the Securities Contracts (Regulation) Rules, 1957.
"Offer of shares to them will ensure that Neyveli Lignite Corporation will be compliant with Rule 19 (2) and Rule 19A of the Securities Contracts (Regulation) Rules," Jayalalithaa added.
She said as the Securities and Exchange Board of India earlier indicated to NLC, the divestment can be through an institutional placement programme or through any method as may be approved by the market regulator on case-to-case basis.
"The above-mentioned Government of Tamil Nadu's Public Sector Undertakings come within the definition of 'Qualified Institutional Buyers' and hence would be eligible to purchase the shares of Neyveli Lignite Corporation under an institutional placement programme," Jayalalithaa said.
She said the central government should not resort to disinvestment under the "offer for sale" route under which share sale can be executed at a day's notice as it would exacerbate the law and order situation in the state.
According to her, disinvestment was a sensitive issue and had provoked all the trade unions to announce their agitation plans, including a notice for an indefinite strike, from July 3.
"I am afraid that this unrest may spread and continue for a long time, leading to the eventual shutdown of the power plants in Neyveli. You will appreciate that with Tamil Nadu already reeling under power scarcity, such a situation will badly hurt the state's economy and cause great hardship to the people," she said.