Nov. 21: Some are calling it the historic blunder dipped in crimson and saffron.

Coal India employees’ reluctance at the behest of union bosses to subscribe to the company’s share issue has cost the staff a windfall gain of Rs 566 crore, if Friday’s stock price is taken into account.

The lost notional income works out to more than a third of Coal India’s annual wage bill, for which they can only blame their unions that cling resolutely to a philosophy that is way past its shelf life.

That not more than10 per cent of employees picked up the shares was well known but only now are most of the workers putting a figure — and possibly chewing their nails in frustration — to their loss.

Last month, Coal India had come out with the mother of all capital issues. It floated an IPO that offered over 63 crore shares and helped the world’s largest coal producer raise a whopping Rs 15,200 crore.

When union bosses couldn’t scupper the flotation — privatisation has always served as a red rag — they ordered the 3.88 lakh workers of the corporation not to invest in the shares.

Picture this: the Coal India stock was offered to investors at an issue price of Rs 245 but retail investors and employees were offered the shares at a 10 per cent discount. On Friday, the share closed on the Bombay Stock Exchange at Rs 331.95, a gain of Rs 99.20 on each employee share that was priced at Rs 232.75.

The Coal India share had touched an all-time high of Rs 357.60 on the BSE on November 5 — and at that level the collective loss to the employees balloons to Rs 712.73 crore.

“We always wanted our employees to become shareholders in the company. Unfortunately, they didn’t participate (in the issue) under the influence of the trade unions,” said R. Mohandas, director (human relations), at Coal India.

The usual suspect in such matters — the CPM-led Citu —was at the forefront of the naysayers.

But Prakash Karat’s party, which once committed “the historic blunder” of turning its back on prime ministership, is not alone this time. The BJP’s Bharatiya Mazdoor Sangh developed cold feet after initially not opposing the issue.

Mohandas said that initially, four of the five trade unions at Coal India and its subsidiaries had agreed to the divestment programme. At a pre-IPO meeting with coal minister Sriprakash Jaiswal, they indicated their support.

At that point, Citu was the only union opposing the stake sale.

“Later on, two trade unions — Bharatiya Mazdoor Sangh and Hind Mazdoor Sabha — backed off and called a strike on the day that the issue opened,” Mohandas added.

However, the Left unions aren’t impressed by the talk of notional gains or losses.

Said M.K. Pandhe, trade union leader and CPM politburo member: “It is a matter of principle. If the workers sell the shares to make money, then the shares will go into private hands. Isn’t that a step towards privatisation?”

“Why did Indira Gandhi nationalise the mines? It was to protect them from going into private hands. This government is inviting private players to loot our natural resources,” Pandhe said angrily.

Citu general secretary and CPM MP Tapan Sen was equally outraged: “It is like picking money from the gutter with your mouth.”

The Congress-backed Intuc was one of the few to support the stake sale plan. But even it was uneasy about the prospect of workers cashing their gains.

“We said our union members were free to buy the shares. But they should not be allowed to sell the shares to private parties. They can sell only to other employees. We are also opposed to privatisation and disinvestment,” said Intuc president Sanjeeva Reddy.

Aituc leader Gurudas Dasgupta said: “It’s not about making money. The workers are against disinvestment, which is why they rejected the offer.”

But the union leaders fail to realise that while waging this ideological battle, over 5.70 crore shares — over 90 per cent of that reserved for employees — went into private hands anyway under the IPO regulations.

What’s more, the qualified institutional bidders — which include mutual funds and foreign institutional investors — together received 28.5 million shares, or exactly 50 per cent of the unsubscribed employee shares.

Jibon Roy, Citu leader and general secretary of the All India Coal Workers’ Federation, said the fact that the employees did not open the demat accounts indicated that they were opposed to the share sale.

The arguments of the union leaders can’t ignore a simple truth: each Coal India worker would have been sitting on a gain of about Rs 15,000 now if all of them had subscribed to the issue. It may seem small but this is expected to swell.

The shareholders are expected to see higher gains in the years ahead when the economy is projected to grow at 9 per cent, which will be fuelled by energy resources like coal. Moreover, employee shareholders at banks like SBI and industrial giants like SAIL and Bhel have seen their stocks surge since they first acquired the shares in the early nineties.

There is no compelling reason why Coal India’s workers should have been denied the gains that employees at other state-owned units have enjoyed.

Asked if the Coal India management would support a proposal to “compensate” employees through an exclusive stake sale in the future, Mohandas said the suggestion would have to come from the unions backed by an undertaking that they would help the employees subscribe to the issue.

“We are open to the idea. But it will have to be accepted by the coal ministry and then the Union cabinet. It won’t be easy,” said Mohandas.