Kerala bid to acquire HLL hits a roadblock

“In accordance with the earlier order, there is no scope for government/government PSEs to participate in the strategic disinvestment process unless it is specifically allowed by the cabinet,” said the letter.
The state-run Kerala State Industrial Development Corporation had participated in bidding for Thiruvananthapuram airport and three years back the state had acquired another central PSU Hindustan Newsprint Limited in Kottayam. (HT)
The state-run Kerala State Industrial Development Corporation had participated in bidding for Thiruvananthapuram airport and three years back the state had acquired another central PSU Hindustan Newsprint Limited in Kottayam. (HT)
Updated on Mar 10, 2022 12:34 AM IST
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By, Thiruvananthapuram

The Kerala government’s plan to acquire the Hindustan Lifecare Limited (HLL), a mini Ratna company of the Union government, suffered a jolt after the Department of Investment and Public Asset Management (DIPSM) wrote to it stating that the state government or public sector enterprises (PSEs) cannot participate in the strategic disinvestment process.

The letter (HT has a copy of it) addressed to the principal secretary to the state industry department has quoted a 2002 order saying as a general policy, the government-owned undertakings or co-operative societies cannot be permitted to participate in disinvestment of PSUs as bidders.

“In accordance with the earlier order, there is no scope for government/government PSEs to participate in the strategic disinvestment process unless it is specifically allowed by the cabinet,” said the letter.

However, the letter did not elaborate reasons for this turnaround. Earlier the government owned Kerala State Industrial Development Corporation (KSIDC) had participated in the bidding for Thiruvananthapuram airport and three years back the state had acquired another central PSU Hindustan Newsprint Limited in Kottayam.

Expressing shock over the decision, state industry minister P Rajeev said, “We will participate in the bidding and if not allowed we will take legal recourse. We sniff a sinister plan to handover the company to a private firm at a throwaway price. We will stake our claim,” said . He said it exposed the Union government’s attitude that profit-making PSUs can be only handed over to private players. The last date for submitting the expression of interest is March 14. The date was extended twice, initially it was January 31 and later February 28.

Last month the state sent a letter to the Centre requesting it not to consider the HLL’s whole assets as a single unit and expressed difficulty in acquiring its global assets. The state is mainly hankering for its property and units in the state especially its headquarters in the state capital situated on 19 acres of prime land that was given to the HLL free of cost in 1967.

But HLL insiders said it has presence in 120 countries, 21 offices and seven major manufacturing units. They said the state’s condition to take over only projects in the state might have forced the DIPSM to send such a letter. According to preliminary information memorandum related to disinvestment, HLL’s 430 acres of land situated in Chengalpattu district in neighbouring Tamil Nadu would not be a part of the package. This land was earmarked for building a vaccine making unit under the universal immunization programme, they said.

Founded in 1967, eying large production of natural rubber in the state, under the Union health ministry, HLL played a key role in family planning campaign of the country distributing condoms at subsidized rates and at times free. Its brand ‘Nirodh’ was once mascot of the family planning campaign. It also makes ‘Moods’, another leading brand. Later it diversified into other areas making intra uterine devices, contraceptive pills, blood bags, surgical sutures, Ayurvedic preparations, women health care products and operating a chain of laboratories. There are 2,000 permanent employees and over 3,000 work on contract basis in different factories, HLL insiders said.

Last year the turnover of the company was 5081.31 crore and net profit was 112.33 crore, said a top official of the HLL, pleading anonymity. Agitated employees said the latest move is a ploy to keep the state away from the bidding. “It is a deliberate move to keep the state out of bidding and give the profit- making firm on a platter to corporate behemoths. We will oppose it,” said Hindustan Latex Employees Union leader K V Jayakumar.

The Centre had mooted the disinvestment idea in 2017 but it did not materialize. Last year, it renewed its bid and invited global expression of interest. The delay really helped the government in its fight against the pandemic — it was first to produce rapid antigen test kits in large-scale in 2020 and later the government made it a nodal procurement agency for medical equipment to fight Covid-19. Its officers were rushed across the world to procure PPE kits, medicine and antigen kits and later, HLL started making them on its own under the “Make in India” campaign.

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  • ABOUT THE AUTHOR

    Ramesh Babu is HT’s bureau chief in Kerala, with about three decades of experience in journalism.

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Tuesday, June 28, 2022