The Telegraph
Since 1st March, 1999
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Shourie agrees to legal scrutiny of divestment

New Delhi, Dec. 10: Capitulating to Opposition demands, Arun Shourie today agreed to consult attorney-general Soli Sorabjee on the legality of relinquishing management control of public sector units through the disinvestment process without first repealing the laws under which they were nationalised or established.

The disinvestment minister gave in to Congress leader Manmohan Singh’s repeated demands by assuring the Rajya Sabha that he would “seek the opinion of (the) attorney-general and report back to the House”.

Singh had made it clear that the Congress would not accept sale through executive action. He asked the government to check its legal facts with the attorney-general, who, he said, should be called to the House to explain the legality of the process.

The Opposition leader said his party’s reading of the Acts nationalising the two oil PSUs that are being put up on the block — Hindustan Petroleum Corporation Ltd and Bharat Petroleum Corporation Ltd — was they could not be sold without repealing those laws.

Shourie argued that solicitor-general Kirit Rawal had advised him that he could sell the PSUs through executive action as they now came under the Companies Act. But the Opposition refused to accept the argument.

The battle over repeal began yesterday when Singh made his point during a suo motu statement by Shourie.

Singh argued that the Acts under which Esso and Burmah Shell were nationalised to create HPCL and BPCL, respectively, provided that these companies would be controlled either by the Union government or companies owned by it.

The BJP is trying to avoid bringing any Bill in Parliament to repeal Acts nationalising or setting up state-run companies, as this would mean running the gauntlet of an Opposition-controlled Upper House and being forced to make compromises.

The Congress has told the BJP it does not necessarily have to come to Parliament with individual Bills repealing each and every Act that set up or nationalised a PSU but that a general policy paper would do.

The Congress stand, supported by the Left, has been strengthened by an earlier Act of the BJP government by which it had repealed the Bill nationalising steel-maker Martin Burn in the early 1970s before making unsuccessful bids to sell it off.

The disinvestment commission has begun preliminary studies on 12 PSUs, including Bharat Sanchar Nigam Ltd, Mahanagar Telecom and Jute Corporation of India. The commission is also understood to be studying the Power Finance Corporation, Rural Electrification Corporation, Central Mine Planning and Design Institute, Cotton Corporation, Hoogly Dock and Port Engineering, National Building Construction Corporation, Rajasthan Drugs and Pharmaceuticals and Indian Medicine Pharma Corporation.

The core group of secretaries is meeting tomorrow and is likely to initiate a discussion on disinvestment in HPCL and BPCL. It would also discuss the possibility of allowing three state-owned undertakings to bid for Engineers India Ltd.

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