Govt to set aside Neyveli shares for employees

The Centre today said its plan to disinvest 10 per cent equity in Neyveli Lignite Corporation (NLC) would include a preferential allocation of shares to employees.

The decision has come even as the company's trade unions are on an indefinite strike, which started today, to protest the disinvestment decision.

The Cabinet Committee on Economic Affairs (CCEA) last month cleared the disinvestment plan in the NLC, which will reduce the government's stake in the company to 83.56 per cent. The government also plans to disinvest 10 per cent equity in National Aluminium Company.

The decision to reserve a portion of the equity earmarked for disinvestment for employees has a precedent. In 2004, when the NDA government divested some of the government's stake in Oil and Natural Gas Corporation, a portion of the public offer was set aside for the corporation's employees, including full-time directors.

The public issue, including the portion reserved for employees, was offered at a small discount to the subscription money paid by institutional investors.

The NLC's disinvestment plan has met with opposition from some political parties in Tamil Nadu, including the DMK, which is in power in the state, and is also a part of the Centre.

Following the CCEA's decision on disinvestment, Tamil Nadu Chief Minister M Karunanidhi asked the Centre to reconsider the decision and even said the DMK would take part in the protests against disinvestment in NLC.

Prime Minister Manmohan Singh has assured Karunanidhi that the central government, while disinvesting 10 per cent of its stake in NLC, would allocate its shares to the employees, a government release said. The Centre's aim was to ensure that the workers had a stake in NLC's future, the release added.

The NLC has the biggest open-cast mechanised lignite mines in the country. It mines 24 million - tonnes of lignite annually and is also engaged in power generation, with an installed capacity of 2,490 Mw.