Big Scam Behind Sale of Oil PSUs Shares

CPI(M) Demands President’s Intervention

THE CPI(M) has alleged that a big scam lies behind the selling of oil sector PSU shares at grossly under priced rates in the stock market and appealed to the President to immediately put on hold the share transaction and order an enquiry into these dubious deals. It charged the government of having a nexus with market manipulators in order to sell at throwaway prices these shares to MNC’s.. The Party lambasted the disinvestment minister, Arun Shourie, for betraying the nation by allowing this massive loot of India’s public resources (see Box).

CPI(M) Polit Bureau member Sitaram Yechury, CPI(M) leader in Rajya Sabha, Nilotpal Basu, and deputy leader, Dipankar Mukherjee made these charges while addressing a news conference in New Delhi on March 23, as part of the continuing series of exposures by the CPI(M). They asserted that this was a distress sale and the government was trying to cover it up by false claims of over subscription. Pointing out that this was just a caretaker government, CPI(M) leaders said they will ask the president, who is a custodian of these national assets, to direct the government to refrain from selling these away for a song. When asked when they would be meeting the president, Yechury said they would first talk to other parties which are willing to stand up against such corruption and then if possible go jointly and represent to the president.

Following are excerpts from the statement released at the press conference:

The CPI (M) asserts that, it is the money of the people of India which has created Navratna PSUs like ONGC and GAIL and the Govt. of the day is only a caretaker and proxy shareholder of the national wealth.   NDA Govt. has no right to liquidate these assets at sunken price   to cover up their financial profligacy and rickety state of finance. NDA government started its term with selling of 25% of GAIL’s share in Nov. 99 at a throw away price of Rs.70/- per share, majority of which were acquired by M/s British Gas & Enron, competitors of GAIL, and is ending its term with another dirty deal of selling grossly under priced shares of India’s national prestigious companies like ONGC and GAIL.

Government’s annual earning from ONGC and GAIL is more than the one time sale of 10 per cent share:

In 2002-03, ONGC paid Rs 3,798 crore as dividend, Rs 4,500 crore as cess (at the rate of Rs 1,800 per tonne of oil produced while the private oil  producing companies are exempted from paying the cess) and Rs 12,377 crore as central government duty and taxes (excluding Sales Tax paid to the state governments. GAIL paid Rs 427 crore  as dividend, and Rs 1302 crore as central government duty and tax. Thus for the year 2002-03, ONGC and GAIL paid Rs 8,725 crore as dividend and cess and Rs 13,679 crore as government duties and tax. And still the government boasts of one time sale for Rs 11,000 crore of assets which fetches Rs 22,000 crore per year to government exchequer!

Name the Share Market Manipulators

The loquacious disinvestment minister owes an explanation to the nation for suppressing information regarding the identity of the bear cartel share market operators who as per his information, had hammered the share market, warranting his intervention during the recent disinvestment IPOs. The minister claimed he knew them but did not name them. It is not a  private matter between the minister, the government and scam stars.  People of this country who have suffered immensely because of the share market scams, have the right to ask the minister to share his information with the nation so that punitive action can be taken against those who are involved. Otherwise it can be presumed that there is a nexus between the government, share market operators speculators and FIIs for manipulating the market where India’s pride - its national oil companies like ONGC and GAIL are being bartered for a song.

ONGC & GAIL – irreplaceable national assets

The CPI(M) further ridicules the hullabaloo created on reported fund-parking by FIIs or investors like Buffet or Sores in ONGC and GAIL. ONGC has not become a fortune 500 company on certification of  FI and FIIs. It has become a global major because of its own strong fundamentals created by sweat and money of people of India. So is GAIL. They are there in spite of Vajpayees, Shouries and not because of them. FIs, FIIs, and speculators are eyeing them for “creeping acquisition” of these irreplaceable national assets – the Navratnas. It is a matter of shame that  instead of protecting such assets, the government is gloating over their acquisition by foreign investors.