STC officers in novel bid to block privatisation move

STC officers in novel bid to block privatisation move

JULY 7: State Trading Corporation officers have come with a unique proposal to block the government's privatisation move. They have offered to pay Rs 100 per share more than the final price quoted by prospective buyers in case the government finally goes ahead with its in-principle decision to privatise STC.

The strongly-worded letter has also sought a clarification whether the law ministry has been consulted regarding the terms and conditions of global advisers and valuers to be appointed.

The disinvestment decision has come as a rude shock to the federation as STC is not covered by any criteria announced from time to time for disinvestment, the letter says.

The move to privatise STC, a profit making dividend paying international trading arm of the government, is thus unjustified and unwarranted, the federation complained.

The federation has also criticised the Core Committee on Disinvestment saying that it has not followed any principle or policy relating to STC sell-off and has largely been influenced by private sector/multinational lobbies.

STC has been created to fulfil certain socio-economic objectives like price support operations to growers, market intervention to support and maintain steady prices for growers and users alike, bulk buying of essential items abroad, develop export markets for non-traditional items and items produced by the SSI sector. The corporation has performed and is still performing these operations efficiently, the federation said, citing recent instances of rubber and tobacco purchases from Kerala and Andhra Pradesh, respectively.

The federation also points out that STC started with a nominal share capital of Rs 1 crore and had issued bonus shares of Rs 20 crore, paid steady dividends year after year ranging from 12 to 30 per cent aggregating Rs 133 crore and also paid corporate taxes amounting to Rs 570 crore besides providing employment to a large number of people during the past few years.

Instead of divesting its entire shares in STC to bridge the budgetary deficit, it would be better if huge dues amounting to about Rs 560,000 crore from private sector bigwigs were recovered, the federation felt.