Releasing the ninth report here on Friday, chairman of the commission, G V Ramakrishna regretted that the government was bypassing the panel although "there is a cabinet decision that no disinvestment will take without the reference to the Commission." This, according to Ramakrishna, was eroding the credibility of the Commission. As far as STC was concerned, the report which was submitted to the government, suggested that the government should sell its entire stake to a strategic buyer after reserving 5 per cent share for employees who opt for VRS.

Ramakrishna said that the share allotment should be at the rate of not more than 200 shares per employee at a discount to the strategic buyer's price, to provide continuation of trading operationsunder private ownership and management with sustainable levels of employment. Manpower reduction through VRS in STC would have to be undertaken simultaneously with the decision for disinvestment, he said.

The STC, he added, has been incurring losses from trading operations in recent years. However, the company was showing net profits only because of large non-operating incomes such as rent, income from investments etc.With regard to HSWL, the Commission said if government failed to find closure feasible, the alternative would be to absorb its annual losses of around Rs. 60 to 70 crore, which should be done after meeting statutory liabilities amounting to about Rs. 136 crore.

However, this must be done on a clear understanding that there would be no fresh recruitment or replacement of retiring employees, the chairman said. Referring to general issues, Ramakrishna pleaded for restoration of the original powers of the Commission regarding supervision and implementation of PSU disinvestment. He regretted thatgovernment was not taking a decision on this. "Let the cabinet decide whether our proposals are accepted or rejected," he said and urged the government to take the issue to the cabinet at the earliest. "All this has seriously eroded the credibility of the disinvestment process as well as that of the Commission and has led to a public perception that the Commission has been marginalised," he said. Ramakrishna also criticised the government for taking second opinion on the Commission's recommendations relating to privatisation of Indian Tourism Development Corporation (ITDC) and other PSUs.

The chairman said that it was ironical that he came to know about a number of decisions on disinvestment only through media reports as the government had not kept him informed. The Commission had earlier threatened to resign in view of the government apathy but the decision was kept in abeyance after Ramakrishna's meeting with the finance minister Yashwant Sinha earlier this month.

Sinha had assured the chairman thattheir proposal would be taken up with the high powered cabinet committee on disinvestment, headed by prime minister Atal Bihari Vajpayee, within two weeks. Asked about Commission's position on this, Ramakrishna said he was awaiting the final word from the government and the Commission would take a decision thereafter. He said the decision on disinvestment through cross-holdings route was not referred to the Commission and pointed out that the PSU share prices had been moving in a "southwardly" direction ever since the government decision. The PSU share index has been going down even though the general share prices have been moving up after the budget.