Tamil Nadu state firms to buy 3.56 percent stake in Neyveli

Chennai, July 15 (IANS) Tamil Nadu Chief Minister J.Jayalalithaa Monday said the central government and the market regulator have agreed to her proposal of state PSUs acquiring 3.56 percent of the central government's stake in Neyveli Lignite Corporation Ltd (NLC).

She said the transaction would cost the five state public sector undertakings (SPSUs) around Rs.500 crore.

The five companies are: Tamilnadu Industrial Development Corporation Ltd (TIDCO), State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT), Tamilnadu Industrial Investment Corporation Ltd (TIIC), Tamil Nadu Urban Finance and Infrastructure Development Corporation Ltd (TUFIDCO) and Tamil Nadu Power Finance and Infrastructure Development Corporation Ltd (Powerfin).

In response to this development, the striking workers have called off their agitation.

In a statement issued here Jayalalithaa said: "At a meeting in Mumbai Monday, the central government and the Securities and Exchange Board of India (SEBI) have agreed to the state government's proposal of the centre diluting 3.56 percent in NLC in favour of state PSUs."

Jayalalithaa said because of her government's actions the NLC stake sale to private parties had been stopped.

"The victory is due to my government's continued action, my own independent steps, workers struggle and due to the united voice of the people of the state," she said.

According to Jayalalithaa, the SEBI's regulation of having a minimum public shareholding of 10 percent in PSUs is a wrong policy as the manipulation of share prices in the market can be done only by private companies and not by PSUs.

Political parties in the state had opposed the central government's decision to divest five percent stake in NLC to meet SEBI norms of having a minimum of 10 percent public shareholding.

Around 27,000 NLC workers were on strike since July 3 protesting the decision.

It was Jayalalithaa who suggested to the Prime Minister Manmohan Singh that the central government can dilute its stake in favour of state PSUs. She also said the dilution can be 3.56 percent as already 6.44 percent is with the public.

After a decision on the stake sale was arrived in Mumbai between the state, central and SEBI officials, Jayalalithaa spoke to Manmohan Singh and thanked him for the cooperation extended in selling the NLC stakes to state PSUs.

She told the prime minister that the workers will withdraw their strike following her public statement on the matter.

On his part, Manmohan Singh thanked and appreciated Jayalalithaa for her action to bring to an end the stake sale problem.

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