Tamil Nadu Chief Minister J. Jayalalithaa Sunday said the Securities and Exchange Board of India (SEBI) has agreed to her suggestion that the central government divest five percent stake in Neyveli Lignite Corporation Ltd. (NLC) in favour of state government undertakings.
In a letter to Prime Minister Manmohan Singh, the text of which was released to the media, Jayalalithaa said: "It is learnt that SEBI has formally offered to the Neyveli Lignite Corporation as one of the options, the possibility of arriving at a special procedure on a case by case basis for the off-loading of shares by the Government of India."
"Clearly, it appears that working out an arrangement to offload five percent equity, or even 3.56 percent of equity, to meet the target of 10 percent, to Government of Tamil Nadu-owned Public Sector Undertakings is something that SEBI can quite easily work out," Jayalalithaa added.
"The Government of India should immediately accept my proposal to sell the minimum required equity under the relevant regulations to State Public Sector Undertakings of Tamil Nadu and also direct the SEBI to quickly work out the modalities of such a transaction," she added.
Jayalalithaa had earlier suggested to Manmohan Singh that the central government offload its five percent stake in the NLC to one or more of the state government undertakings which come under the definition of "qualified institutional buyers" (QIB) eligible to purchase the NLC shares under an institutional placement programme (IPP).
She said the offer of shares to the state government undertakings will ensure that the NLC will be compliant with the relevant Securities Contracts (Regulation) Rules.
According to her, the delay on the central government's part on this issue will put the people of the state to extreme hardship.
Referring to the labour unrest at the NLC following the centre's decision to divest its stake, Jayalalithaa said the entire South India will be affected by the loss of around 2,500 MW, making the management of the southern grid difficult.
She said due to the strike, the power deficit state will not only be losing 1,178 MW of its share from NLC, "but also will prevent the state from drawing an additional 200 MW because of the consequential loss of inter-state transmission capacity of power amongst the southern states."
According to her, the labour unrest will also affect power generation of 250 MW by a private independent power producer (IPP) dependent on lignite from NLC.
