In a letter to Prime Minister Manmohan Singh, Minister of State for Commerce & Industry D Purandeswari has urged not to allow further divestment of the government's 29.5 per cent stake in Hindustan Zinc.
In the letter, dated February 19, Purandeswari alleged the Vedanta Group, which owned about 71 per cent in the company, hadn't paid salaries to Hindustan Zinc employees for the past two months. This, the minister said, was a coercive method aimed at lay-offs. She sought Singh's intervention into the matter so that the company's operations in Visakhapatnam were protected.
Following this, the Prime Minister's Office asked the secretary in the Ministry of Mines to send his views on the alleged irregularities by Vedanta Group, the majority shareholder in Hindustan Zinc.
Purandeswari also alleged some Hindustan Zinc employees were forced to accept the voluntary retirement scheme (VRS). The company employs about 300 people directly. An additional 2,000 people were indirectly dependent on the company, the minister's letter said. She said Hindustan Zinc representatives in Visakhapatnam had told employees as the company had been reporting losses, the management would consider transferring willing employees to its Rajasthan facility. This, Purandeswari said, was a ploy to convince employees to quit.
In reply to Business Standard queries, a Vedanta Group spokesperson said, "Hindustan Zinc's Visakhapatnam unit has a capacity of 56,000 tonnes a year of zinc, along with by-products. But in recent years, the unit has been seeing a continuous decline in production. In 2010-11, zinc production stood at only 38,663 million tonnes (mt); in 2011-12, it stood at only 28,445 mt. Due to the power situation in Andhra Pradesh, there have been no operations at the plant for about 12 months. This has aggravated losses."
Though the company had considered expansion, this wasn't possible as the unit was located in one of the 'critically polluted zones' identified by the Central Pollution Control Board and the Ministry of Environment & Forests, the spokesperson said. "Considering all the aspects, the company decided to transfer employees to other operational units in Rajasthan. Employees who were not willing to be transferred were offered an attractive VRS. A total of 32 employees readily opted for the transfer. They have already joined various locations," the spokesperson added.
Purandeswari also said Vedanta Group Chairman Anil Agarwal had recently said his company was making a Rs 17,000-crore offer to buy the Centre's residual stake in Hindustan Zinc.
According to Purandeswari, Agarwal's intentions were ambiguous.
After he acquired complete control of the company, he would convert it into a real estate venture, she added.
