7. INDIA: DISINVESTMENTS

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DISINVESTMENTS

 Dr. Manmohan Singh Government did not expose any corrupt deed of the previous Government.

The new Government, on 2 June 2004, decided to reduce the Foreign Direct Investment (FDI) in the Delhi and Mumbai airports from the 74 percent decided by the previous Government to 49 percent. A Union Minister described this as restructuring and not privatization. Later, the Government privatized the above two airports. This proved that the Government - in bad faith - enacted a drama to give the airports to private parties.

A private company, on 8 June 2004, requested the Union Government to sell the 49 % residual shares in the BALCO to its buyer. It must be noted that the previous government had either ignored or turned down this request because of the fear of violating the guidelines devised for privatization.

Now,  the newspapers demanded the Government to privatize the MTNL and BSNL - the two public sector telephone companies - to save them from competition. They cautioned that the cost of his delay would run into Re. trillions.

 The papers said the above to usurp the MTNL, BSNL and the other Public Sector Undertakings (PSUs.) The truth was that the private telephone companies flourished through the aid of the MTNL and the BSNL.

The Government, on 7 October 2004, sold 8.6583 crore shares of the NTPC. None in India uttered even a word against it. The Left parties did not open their mouth. However,  Mr. V. Sabarimuthu – the author of this book-  submitted to His Excellency the President of India that  the Government gave the shares of the PSUs to some people and bullets to the people of the North-East.  

                      

The newspapers now said that the act of offloading the shares of PSUs in the lines of the NTPC had eminent sense and challenged the Government to divest the shares of other PSUs.

 They indirectly ridiculed this writer saying that even lower division clerks in India would get the Nobel Prize for their ignorance of economics.

The government, on 20 October 2004, hiked the FDI cap for domestic airlines from 40 to 49 percent.

             In December 2004 a private company confessed that it had picked up substantial stake in the public sector ONGC public issue through the aid of some unknown companies. The company disclosed that it would benefit from any gains that would come through those investments. This showed that some companies- not the public or people- cornered the public issues of the PSUs by simple manipulations. Obviously, the NDA Government had sold the shares of the PSUs in naked selfish interests to the detriment of 1000 million people. Thus the premonition of this writer is proving correct.

       The Economic Times, on 5 January 2005 reported that the public issue of Dena Bank was oversubscribed by 12 times. The bank sold eight crore shares of Rs.10/-each at a premium of Rs.17/-. Thus, despite several letters, the Government sold the shares of a nationalized bank to the enlightened people of a few States and sidelined the so-called illiterate people of many States.

       On 22 February 2005, Mr. S.S.Kohil, CMD, Punjab National Bank, the third biggest bank in India, said that the public issue to sell eight crore-equity shares of his bank would start on 7 March 2005. Later, there were reports that the issue was oversubscribed by twelve times. Then, why did the banks advance money to buy its shares? Is it not misuse of official power?

          The Business Line on 24 February 2005 reported that Bank of Punjab (not Punjab National Bank) issued about 18.78 per cent equity shares to four investors including The Bank of Nova Scotia, Canada and Bharti Enterprises Pvt. Ltd. at a price of Re. 38/- per share aggregating Re. 92 crore. The media  did not disclose the reasons for selling the shares or the abstract code followed to sell them. 

   

             The second public offering of Punjab National Bank (PNB) was oversubscribed by over two times within minutes of its opening on 7 March 2005.There were reports that one or two other nationalized banks advanced money to some favoured people to buy the shares of the PNB. Thus one Public Sector bank sold its shares and another Public Sector bank gave money to selected people to buy the shares. It is illegal and unconstitutional as it is arbitrage trading. It is like PNB itself giving money to enable the buyers to buy its own shares. 

          In the meantime, the Union Government handed over the new international airport at Hyderabad to the GMR , a private company. With regard to this decision, Mr. Penumalli Madhu and Mr. Babu Rao, two CPI (M) Members of Parliament from Andra Pradesh said, “1. The present airport is sufficient for the next 12 years. 2. The Airport Authority of India (AAI) had paid 90 crore for further expansion and rehabilitation. 3. The AAI had spent Re. 800 crore for expansion. 4. The builder would spend only Re.250 crore while the Government would arrange Re. 450 crore as soft loan, Re 250 crore as Government grant and Re.50 crore as grant from the AAI. 5. The builder is also granted 500 acre of free land and 6. The existing airport at Begumpet must be closed down within three years by which time the Shashabad Airport would be operational. The Hindu mentioned these points on 16 March 2005.

     The above paper did not publish the crucial point that the new builder would offer 10 per cent of its share to mobilize Re. 10,000 crore from the market and the financial institutions would be asked to buy the shares thereby leading to economic deprivation all over India.

           The Business Line on 26 April 2005 reported that the public issue of Oriental Bank of commerce (OBC), a Public Sector Bank, was oversubscribed on the first day of its opening itself.

  

Now, The Hindu reported that the 17.5 acre Mumbai Textile Mills   belonging to the National Textile Corporation was sold for Re. 702.2 crore to the Delhi based DLF group. At the same time, Apollo Mills, another NTC Mill, was sold to Loda group of developers for Re.180 crore. The paper said that the bids for other NTC Mills as well as Kohinoor Mills would be opened by the end of July 2005. No one opposed these sales. No one was opposing the impending sales either. As there was no discussion before or after the sales, no one was in a position to say that the Government was flouting public opinion. When there is no public opinion, nothing would restrain abuses of power!

Notwithstanding the 52 letters, the Government sold another 9 acre Mill belonging to the NTC for Re. 441crore on 21 July 2005 to a company connected with the former Union Minister for Industries and Lok Sabha Speaker Mr. Manohar Joshi who had a net asset of Re.2.5 crore while joining the Union Cabinet.

 Tender for the NTC Mill, Elphinstone Mill, acquired by the Government in 1983 as a sick Mill could not be opened because the sale was challenged by its former owner. The unconstitutional nature of the sale could be discerned. In fact, the land belongs to the people.