UBS Secs holds Bhel stake, says CPI(M)

Communist Party of India (Marxist) MP Dipankar Mukherjee has written to Prime Minister Manmohan Singh pointing out that the Sebi-debarred company UBS Securities Asia Ltd holds a stake in the Bharat Heavy Electricals Ltd .

His letter comes on the heels of CPI (M) General Secretary Prakash Karat's statement on Sunday that the government's decision to disinvest 10 per cent stake in Bhel would lead to 'serious repercussions',

In a letter dated 4th June, Mukherjee points out that the financial institutional investor (FII) UBS Securities Asia holds 0.82 per cent stake share in Bhel and 'Merill Lynch Capital Market (with 0.94% shares) is reportedly having links with UBS as well as GE Capital.'

He also says, "Our earlier apprehension that the major global competitors of Bhel viz. GE (USA), Alstom (France) and Siemens (Germany) etc are eyeing for a foothold in BHEL through FIIs, is therefore well founded."

UBS Securities Asia Ltd was debarred by the Securities and Exchange Board of India (Sebi) for a year for alleged market manipulation in the market crash of May 2004. Mukherjee says that in the light of this information and the shareholding pattern of Bhel, the Government should review its decision, since ' it may only facilitate entry of one of the major global competitors of Bhel through the back door, either through FIIs and through their front companies in India.'

Mukherjee says that the present shareholding pattern of Bhel shows that 22.74 per cent of 33 per cent shares disinvested by the National Democratic Alliance (NDA) Government are held by FIIs.

According to him when the disinvestment of these shares was announced in the early 1990s, it was pronounced that mutual funds, investment institutions in the public sector and workers would hold the bulk of the shares.

"Present shareholding of workers is only 0.12% and that of the Indian small investor is 0.89 %," he says.

With Mukherjee's letter the CPI (M) has increased the pitch of its protest against the disinvestment in the blue chip Navaratna Bhel.

Karat had called the decision the government's "irst serious breach of the National Common Minimum Programme."