Coal India is a government company and its functioning cannot be left to the market and minority shareholders,Coal Minister Sriprakash Jaiswal has said.
Brushing aside the criticism that the government was running the Maharatna PSU with a diktat at the cost of minority shareholders,Jaiswal said,”whosoever bought Coal India shares,knew it well that it is a government company and that our government is committed to follow a socialist path.
“If someone had bought the Coal India shares thinking the company will run the way they want or the way the market wants,it is not possible,” the Coal Minister said.
The government yesterday issued a Presidential direction to the company to sign fuel supply agreements with power producers assuring them a minimum of 80 per cent of the delivery committed. Ninety per cent of the shareholding of the market-listed company vests with the President of India.
Any shortfall in commitment by the Rs 50,000 crore company will attract penalty which may run into over Rs 100 crore,analysts said.
Several independent directors and at least one of the leading minority shareholders,TCI of UK have questioned the move. The TCI has even threatened even a legal action against the company.
When the company came out with its Initial Public Offer in 2010,offloading 10 per cent equity,it had stated in the papers filed with the market regulator SEBI that ” President of India may issue directives with respect to the conduct of our business or our affairs for as long as we remain a government owned Company…”.
It had also made it clear that “interests of the Government of India may be different from our (company) interests or the interests of our other shareholders. As a result,the GoI may take actions with respect to our business and the businesses of our peers and competitors that may not be in our or our other shareholders’ best interests”.