New Delhi, July 4: An inter-ministerial group (IMG) will hold a meeting next week to decide whether the employees of State Trading Corporation should be allowed to form a co-operative society and bid for the state-owned company when it is put on the block.
The government, which has a 91 per cent holding in STC, is planning to offload a 65 per cent stake in the ailing commodities trading company. The sale is likely to be completed by the year-end.
“The meeting on July 9 will decide whether the employees should be allowed to bid for the stake to be divested,” said a senior disinvestment ministry official.
The proposed stake sale is part of the selloff programme under which the government aims to garner Rs 13,200 crore through the privatisation of key companies, including National Aluminium Corporation (Nalco) and Bharat Petroleum Corporation (BPCL). Mutual funds, along with Unit Trust, hold the remaining 9 per cent in STC.
“Though there aren’t any rules barring employees from bidding for their firm, the government discourages these bids,” the official said, adding that such bids might not ensure a management revamp that is essential to turn around a sick unit.
This is not the first time that such a proposal has come up. The employees of Engineers India Ltd also wanted to form a co-operative to bid for the PSU which is being put on the block, but it was nixed by its administrative ministry — the ministry for petroleum and natural gas.
The government plans to divest a 51 per cent stake in Engineers India Ltd which provides project services to petroleum companies.
STC trades in rice, wheat, coffee, sandalwood and directly imports kerosene and fertilisers. The company, which used to rake in profits during the period when import of a large number of commodities was canalised through it, has become a loss-making entity since 2000.
During 2002-03, STC registered a higher net loss of Rs 68.89 crore as against a loss of Rs 40.34 crore clocked in 2001-02. It registered a loss of Rs 77.49 crore in 2000-01. However, in 1999-2000, it had recorded a profit of Rs 228 crore.