Unions protest as CSL stake sale revives ‘privatisation’ fears
The Central government’s latest decision to dilute its stake in Cochin Shipyard Ltd. (CSL) through an Offer for Sale (OFS) has revived concerns among employee
The Central government’s latest decision to dilute its stake in Cochin Shipyard Ltd. (CSL) through an Offer for Sale (OFS) has revived concerns among employee unions over what they fear as gradual privatisation of the profit-making public sector enterprise. Trade unions affiliated to the CPI(M) and the Congress staged a protest outside the South Gate of the shipyard on Wednesday, demanding that the Centre withdraw the proposed share sale and retain the company under full public ownership. Cochin Shipyard Employees Federation (CITU), Cochin Shipyard Employees Organisation (INTUC), Cochin Shipyard Employees Union and Cochin Shipyard Workers Union (CITU) took part in the protest meet.
The unions alleged that successive rounds of stake dilution would eventually weaken government control over the strategic shipbuilding and ship repair company. Union leaders, in a statement, said about 32.14% of the government’s holding has been diluted in phases since the Centre initiated disinvestment in the company in August 2017 through an initial public offering (IPO). While the government’s share came down to 75% following the IPO, the government periodically reduced its holding upto 67.91% through minor stake sales before announcing the latest OFS. The government announced the OFS with a base offer of 2.52 per cent of its paid-up equity and an additional 2.52 per cent as the green-shoe option in case of over subscription.
With this the government’s stake comes down to around 62%. “The majority of stakes remain with the government still owing to the initial reactions by the unions to the disinvestment move. There is no ground for privatisation of the company which has been consistently recording profit,” Cochin Shipyard Employees Federation (CITU) president M Anilkumar said. He alleged that the minor stake sales were aimed at gauging responses of the stakeholders to the Centre’s attempt to privatise the entity. The CSL management, meanwhile, stated that the unions’ fears were out of place.
“The latest OFS will never impact in anyway the operational aspects of the CSL. We will remain as a government company with 62.86% of shares. As far as the information I have, I don’t think further dilution will happen in the near future,” said Jose V.J., chairman and managing director, CSL.
The BriefWire