Financial Daily from THE HINDU group of publications
Friday, Sep 02, 2005
Industry & Economy
Divestment of Kerala Govt stake in four PSUs deferred
Mony K. Mathew
Thiruvananthapuram, Sept. 1
THE State Government has deferred decision on the proposals for divestment of its stake in four public sector units.
The Government had invited bids for divestment of its stake in Keltron Counters Ltd, Kerala State Detergents and Chemicals Ltd, Travancore Plywood Industries Ltd, and Kerala State Salicylates and Chemicals Ltd. But the Cabinet sub-committee on public sector undertakings, at its meeting recently, had deferred a decision on the proposals.
The meeting also decided that the PSUs should seek government assistance for implementing voluntary retirement scheme (VRS) for their employees before September 30 this year. The employees will not be able to avail themselves of the VRS option after that date, according to sources.
Further, the PSUs lying closed and those that cannot be rehabilitated through one-time settlement of dues will be liquidated and the employees paid as per the Industrial Disputes Act.
The Industries Department had sought increase in the current year's budgetary provision for restructuring of PSUs from Rs 50 crore to Rs 84 crore. This was in view of the fact that out of the allocated funds, Rs 35.16 crore had already been spent, leaving only Rs 14.84 crore for the rest of the year.
However, the Finance Minister, who is a member of the Cabinet sub-committee, ruled out any increase in the budgetary provision for the current year, the sources said.
The meeting decided that the restructuring proposals from various PSUs would be prioritised by the Industries and Finance departments for release of funds within the budgetary provision. Also, the PSUs would be allowed to sell their unused assets through a transparent procedure to raise the required resources for restructuring.
In the case of Astral Watches Ltd, wholly owned by the Kerala State Industrial Development Corporation (KSIDC), the meeting noted that though the asset valuation report had been submitted by ICICI-Kinfra and the District Collector, the fixing of base price had not been done so far.
In the meantime, the company had implemented VRS for half of its employees with Government funds, while KSIDC advanced funds for retirement of the remaining employees. The KSIDC had requested that it be compensated through sale of company assets in a transparent procedure.
The sub-committee decided that the KSIDC, being the 100 per cent shareholder, could be allowed to divest its stake after fixing a base price commensurate with the market situation.
A proposal by Kerala State Drugs and Pharmaceuticals Ltd for an advance of Rs 2.5 crore from the State Health Department was also approved by the sub-committee. The advance was sought for executing orders worth Rs 6.45 crore for supply of medicines to the department.
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