Divestment Ministry Digs Law Books After SC Ruling

Mumbai, Sept 18: | Updated: Sep 19 2003, 05:30am hrs
The disinvestment ministry has begun to dig into legislations that are around 30 years old to find out how many public sector units on its divestment list will have to seek Parliamentary approval for their privatisation.

The Supreme Court on Tuesday ruled that the government would have to seek approval of Parliament to privatise Hindustan Petroleum Corporation Limited (HPCL). According to a top ministry official, the ministry has initiated an exercise to determine which of the PSU companies will need the approval of Parliament for disinvestment. The ministry will have to find out the details in the case of each company, because even if a small part of a companys asset has been taken over by the government, Parliamentary approval will be needed. For example, in the case of HPCL only 26 per cent of the assets were taken over by the government, the official points out.

Some of the companies which the official said will require Parliamentary approval are National Textile Corporation (NTC), State Trading Corporation (STC), Hindustan Copper and Burn Standard Company, among others. Officials feel that many loss-making companies may fall under the purview of the judgment. The officials pointed out that Maruti Udyog was also formed under an Act of Parliament.

The official, however, gave a clear indication that the process would be time consuming and there could be ambiguity in some cases. We will have to hunt for the legislations which are around 30 years old now. It will take at least 15 days to determine which of the companies could fall under the Supreme Courts verdict.

Most merchant bankers who have been appointed as advisers were unwilling to go on record over how the government would honour the Supreme Courts judgment. One of the merchant bankers felt that the government may try to seek an omnibus approval from the Parliament and get the policy amended once and for all.

Currently, only HPCL and BPCL are the two oil companies which are on the list of companies to be divested by the government. Other PSUs which are on the block include Balmer & Lawrie, Bharat Opthalmic Glass Braithwaite & Company, Central Inland Water Transport Corporation, Engineering Projects India, Engineers India, Fertiliser and Chemicals Travancore, among others.

Disinvestment ministry officials involved with the divestment of National Aluminium Company refused to comment on whether Nalco will require the approval of Parliament for its disinvestment.