Millennium Post

Divest Neyveli Lignite’s stakes to state entities, says Jaya

Tamil Nadu chief minister J. Jayalalithaa on Tuesday suggested to the central government that it can divest five percent stake in mining-cum-power generation company Neyveli Lignite Corp Ltd (NLC) to state government undertakings.

In a letter to Prime Minister Manmohan Singh, the text of which was released to the media here, Jayalalithaa said the solution to the opposition to the central government's move to divest five percent stake in NLC needed an unconventional and pragmatic solution.

‘I propose that the five percent Government of India's shareholding in Neyveli Lignite Corporation be offered to one or more of Government of Tamil Nadu's State Public Sector Undertakings, such as the Tamil Nadu Industrial Development Corporation, State Industries Promotion Corporation of Tamil Nadu and Tamil Nadu Industrial Investment Corporation,’ she said.

According to her, such entities fall within the meaning of ‘public’ as defined under Rule 2(d) of the Securities Contracts (Regulation) Rules, 1957. ‘Offer of shares to them will ensure that Neyveli Lignite Corporation will be compliant with Rule 19 (2) and Rule 19A of the Securities Contracts (Regulation) Rules,’ Jayalalithaa added. She said as the Securities and Exchange Board of India earlier indicated to NLC, that divestment can be through an institutional placement programme or through any method as may be approved by the market regulator on case-to-case basis.

‘The above-mentioned Government of Tamil Nadu's Public Sector Undertakings come within the definition of 'Qualified Institutional Buyers' and hence would be eligible to purchase the shares of Neyveli Lignite Corporation under an institutional placement programme,’she said.
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