In what seemed a political understanding, Trinamool Congress chief and Railway Minister Mamata Banerjee stayed away from a cabinet committee meeting where the government finally cleared two disinvestment proposals she had been opposing.
The divestments, in government-owned Coal India (CIL) and Hindustan Copper Ltd, were passed by the Cabinet Committee on Economic Affairs (CCEA) today. After disinvestment, the government holding in CIL will come down to 90 per cent and in Hindustan Copper to 81.44 per cent.
Hindustan Copper would also be raising fresh equity of 10 per cent. The issues are expected to be launched in the second half of the financial year.
The two disinvestments were the first ones to be cleared after the ministry of finance notified the new listing norms for companies. To comply with the norms that require minimum 25 per cent public float, CIL will need to further offload 15 per cent equity in the stock market over the next two years. Hindustan Copper would require to come out with an offer of another 6.5 per cent equity.
Banerjee was present at the CCEA meeting last week when the divestment issues had to be dropped from the agenda. Top Congress sources had said they wanted no head-on collision with its biggest ally, who had just came back to Delhi after a stupendous success in West Bengal's civic elections.
Pranab persuades
Finance Minister Pranab Mukherjee, who chairs the CCEA and is also the Congress party's chief political trouble-shooter, held talks with her over the weekend. Banerjee stayed away from today's meeting and the CCEA was able to take up the issue and clear the divestment. Both companies are Kolkata-based and Banerjee had publicly said she rejected the disinvestment option for both.
This will now enable Banerjee to publicly maintain she did not attend the cabinet meeting when the decision was taken. She spent the day in Kolkata but had, till evening, said nothing on the issue. Union Coal Minister Sriprakash Jaiswal told reporters all the decisions were taken by consensus.
Representatives of CIL and Hindustan Copper staff unions had met Banerjee quite a few times during the past month, urging her to oppose the proposals. Jaiswal, however, maintained that the CIL disinvestment had the support of all the trade unions, except the CPI(M)-run CITU. To placate the unions, Coal India had earlier taken the market regulator, Sebi's permission to offer shares not only to its own employees but to that of its seven subsidiaries, too. Retail investors and employees will get a 5 per cent discount on the issue price of shares of the two companies. One per cent of shares in the CIL issue and 0.57 per cent in Hindustan Copper have been reserved for employees.
After the two proposals were cleared, the Trinamool Congress leadership in Delhi declined to comment. Its chief spokesman here, Sudip Bandopadhyay, told Business Standard: "I can't comment on this. I am in Delhi for some other purpose. You talk to our Lok Sabha MP, Kalyan Banerjee." Banerjee was unavailable despite several attempts to reach him on his cellphone.
A Trinamool minister of state told Business Standard on condition of anonymity, "The way the finance minister pitched for disinvestment, arguing it will benefit the common man and employees of the company, made it very difficult for us to oppose it." The minister also revealed that Banerjee had stopped discussing the issue with her party brass during the past few weeks. This, according to Trinamool insiders, might be an indication that an informal agreement had been reached between the two sides over the issue.
