Financial Daily from THE HINDU group of publications
Tuesday, Apr 19, 2005
Mergers & Acquisitions
Industry & Economy - Steel
Government - Politics
IISCO-SAIL merger: Montek riles Left again
Kolkata , April 18
THE recent statement made by the Planning Commission's Deputy Chairman, Mr Montek Singh Ahluwalia, against the proposed merger of IISCO (Indian Iron & Steel Co) with SAIL (Steel Authority of India Ltd) may lead to another round of bickering between the Left parties and their colleagues in the UPA Government.
The Leftists feel that Mr Ahluwalia has gone beyond his brief to express an opinion against the merger because the UPA Government had already set a "specified time period" to complete the merger formalities.
The Planning Commission chief has suggested that SAIL should put IISCO on the block, seek tenders from private organisations, and then acquire it after outbidding others. He felt that the merger was against the laws of the market economy.
Mr Nilotpal Basu, leader of the CPI (M) in Rajya Sabha, described Mr Ahluwalia's views as "bogus" and added that he had no right to make such a comment. "He is only tarnishing his own image. We feel that our worst fears about him are coming true," Mr Basu told Business Line.
He went on to clarify that IISCO, which had turned around and had started registering profits, was a subsidiary of SAIL. The Union Government did not own IISCO and, hence, had no right to take a decision on the matter. Moreover, the idea of SAIL selling IISCO and then acquiring it again sounded "extremely ridiculous," to say the least.
On the proposal to privatise IISCO, Mr Basu asked: "Where was Mr Ahluwalia when we were running from pillar to post to sell off IISCO? Not a single private investor was forthcoming to acquire the company at that time. Why is he coming up with this proposal now?"
This is the second instance where the Leftists and Mr Ahluwalia have taken opposite stands on a particular issue. Last year, the Plan panel was forced to withdraw the foreign experts it had appointed in its consultation groups owing to Left pressure.
This episode, too, has enough firepower to ignite another face-off between the Left parties and Mr Ahluwalia. Mr Basu said that, "No one else in the Planning Commission has opposed the merger, except him."
He ruled out any impact of Mr Ahluwalia's statement on the IISCO-SAIL merger. When asked whether the Left parties would oppose any delay in the merger exercise, he said, "The entire Parliament would protest as it would lead to a breach of privilege of the Union Government."
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