The finance ministry on Sunday said that the capital market regulator Securities Exchange Board of India (SEBI) has given its consent to the alternative proposal, to allow qualified state-run institutions to purchase Centre’s 5% stake in the Chennai-based public sector company Neyveli Lignite Corporation (NLC).
Last month’s Cabinet decision to sell 5% stake in NLC had triggered howls of protest from its employees with the matter threatening to snowball into a major political issue.
Tamil Nadu chief minister J Jayalalithaa has urged Prime Minister Manmohan Singh not to sell the stake to private parties by the standard offer for sale route through stock exchanges.
Instead, she had offered an unconventional option to buy the stake through Tamil Nadu’s public sector undertakings.
“SEBI is of the view that the proposal could get covered within the guidelines on Institutional Placement Programme (IPP). However, the exact details needs to be worked-out that require discussions with the officials of the government of Tamil Nadu, ministry of coal and the department of disinvestment,” a finance ministry statement said on Sunday.
The disinvestment department had sought SEBI’s views on the Tamil Nadu government’s proposal to buy the stake. SEBI, which wrote back to the finance ministry last week, is of the view that the 5% stake can be carried out well within the laid down IPP rules. The acquirer has to be registered with SEBI as a Qualified Institutional Buyer (QIB).
The finance ministry has now asked the Tamil Nadu government to nominate officials in order to discuss the modalities with SEBI and finalise the contours of the transaction.
Jayalalithaa again wrote to the Prime Minister on Sunday, asking him to direct SEBI to quickly work out the modalities.