Offer NLC stake to state PSUs: Jaya

Tamil Nadu Chief Minister J Jayalalithaa today suggested to the Centre to sell 5 per cent shares it had proposed to disinvest in NLC to state PSUs for preserving the company's public sector character and resolving workers unions opposition.
In a letter to Prime Minister Manmohan Singh, she said the Centre could sell five per cent of its shareholding in the Neyveli Lignite Corporation to one or more of the state PSUs -- Tamil Nadu Industrial Development Corporation (TIDCO), State Industries Promotion Corporation of Tamil Nadu (SIPCOT) and Tamil Nadu Industrial Investment Corporation (TIIC).
The proposal by Jayalalithaa comes in the backdrop of the NLC trade unions threatening to strike work from July 3.

She said the aforesaid PSUs came within the ambit of 'Qualified Instituional Buyers' and fell under the meaning of "public" defined under relevant SEBI (Securities Exchange Bureau of India) rules.
She said her earlier proposals had not been accepted by the Centre. She had suggested to Singh about the possibility of delisting NLC by buying back the 6.44 per cent currently in public hands through the buyback mechanism available under SEBI regulations.
She had also suggested amending Securities Contracts (Regulation) Rules, 1957, to make a special exemption for NLC.
"I believe that this situation requires an unconventional and pragmatic solution. Therefore, I propose that the 5 per cent 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, ie. TIDCO, SIPCOT and TIIC," she said.

Such entities fell 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 NLC will be compliant with Rule 19 (2) and Rule 19A of the Securities Contracts (Regulation) Rules, she said.