People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 35

August 29, 2004

   Centre Warned Against Selling BALCO Equity


THE Communist Party of India (Marxist) Rajya Sabha member of Parliament Dipankar Mukherjee has asked the Centre not to sell its residual 49 per cent equity in the privatised Bharat Aluminium Company (BALCO) till the Fact-Finding Committee, constituted by the previous NDA Government,  to look into labour related issues submits its report.


Warning that the report might reveal serious violations of the shareholders agreement,  Dipankar Mukherjee in a letter to the Finance Minister P Chidambaram has said that though the committee was formed one and a half years ago, it had not submitted its report till date.



“There is an apprehension that the report has not been submitted, as the same would have revealed serious violations of the shareholders agreement on labour related issues, ” he says adding that “under the circumstance, it will not be prudent for the government to sell its residual 49 per cent equity till an authentic report is available from the Committee on the violations of the shareholder’s agreement as pointed out in number of representations from the employees of BALCO to the concerned ministry and Prime Minister time and again.”


In a similar letter to the Finance Minister, the CITU President MK Pandhe, has also urged him to stall the move of transferring the residual government equity in Balco to Sterlite till the report of the committee is available.


The letter states:  “You are aware that all the central trade unions had opposed sale of residual 49 per cent government stake in BALCO to Sterlite for several reasons and I had already written to you one month ago conveying the ardent appeal of the BALCO employees not to sell the residual government stake to Sterlite. In fact, the whole issue of BALCO-sell-off is crucial and deserves a serious relook in all its aspects. I am yet to get a response on the same.


“Meantime, in reply to the questions raised in Parliament (Rajya Sabha), the Minister of State for Finance S S Palnimanckam has gone on record on August 17, 2004 that the government is not retracting from the decision of selling the residual government equity in BALCO to Sterlite as the same is obligatory as per the “Shareholders’ Agreement” between the government and Sterlite.


“You will appreciate that the obligations under the “Shareholders Agreement” cannot be one-sided affair and violation of the said agreement by one party requires the other party, the government in this case, to review the whole deal and take appropriate corrective measures, ” writes Pandhe.


It may be noted that the Fact-Finding Committee was appointed  following   several complaints of flagrant violations of the shareholders’ agreement by the Sterlite in BALCO on labour related matters from all the unions there. Which surfaced in the meeting between the Prime Minister and all central trade unions in October 2002.  The then Prime Minister, being convinced on the prima facie violation, constituted the committee’ comprising BMS President  Hasubhai Dave, Employers Federation of India President Sharad Patil and a representative each from the Labour Ministry and the Disinvestment Ministry.


The terms of reference of the committee were to assess whether lay-off/retrenchment has been resorted to by the concerned companies and whether there were any deviations from the shareholders’ agreement signed by these companies with the Government of India in respect of clauses dealing with labour issues.