NEW DELHI, AUG 6: The Disinvestment Commission has recommended sale of shares of Shipping Corporation of India (SCI) and Pawan Hans Helicopter Limited (PHL) in favour of other public sector undertakings utilising their services.

The fourth report of the Commission, submitted to the government on Wednesday has also suggested strategic sale of Hindustan Copper Limited. It, however, opposed the dilution of governemnt equity in the Power Grid Corporation for the time being.

Talking to newsmen, Commission chairman G V Ramakrishna said that in case of the SCI the government should disinvest the shares in favour of the oil refinery companies. It said that 30 per cent of the equity may be offered to IOC, HPCL, BPCL, CRL and MRL in proportion to their net profits. In addition, 10 per cent could be offered to private sector and joint-sector refineries.

The prices at which the SCI shares are transferred to the refineries may be determined through a valuation exercise to be undertaken by a specially appointed financial adviser.

As a first step, he said, the board of SCI should be broad-based by inducting a few non-executive directors from relevant disciplines. At the same time, the composition of the board should also reflect the share holding of the company and all refinery companies who hold a part of the equity should be represented on the board. He said that this was the pattern world over and could be followed in India also.

In case of Pawan Hans, Ramakrishna said that the company should be converted into a subsidiary of ONGC through sale of shares. The recommendation had been made because ONGC uses the services of Pawan Hans most. The report adds that, "transfer of shares is expected to be mutually beneficial."

However, in the event that ONGC was not interested, the Commission recommended that the government should sell its entire holding of 78.5 per cent to an investor. The Commission has also suggested writting off the loan plus interest given to Pawan Hans.

As far as Power Grid Corporation was concerned, the Commission was of the view that the company, "operates in an extremely strategic area of infrastructural activity and, therefore, it is a core PSU."

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.