Govt to consider Maruti divestment on June 23

New Delhi, June 12: The Disinvestment Ministry has favoured offloading of government equity in automobile joint venture Maruti Udyog Ltd (...

New Delhi, June 12: The Disinvestment Ministry has favoured offloading of government equity in automobile joint venture Maruti Udyog Ltd (MUL) and the issue is likely to come up for discussion on the June 23 meeting of Cabinet Committee on Disinvestment (CCD).

The government, which initially had 74 per cent stake in the joint venture, offloaded 24 per cent stake to Suzuki in two tranches in 1987 and 1992. Maruti’s market share has been steadily coming down ever since the advent of other small cars like Hyundai’s Santro, TELCO’s Indica and Daewoo’s Matiz. In the last couple of years, the market share of MUL has come down from an overwhelming 80 per cent to about 60 per cent.

Baijal said it was better for the government to get out of public sector enterprises while they were making profits rather than selling them after competition eats into their profits. "All these profit-making companies, which were making huge profits because of their monopolistic status, are now facing severe threat," he said.

Interestingly, former Industry Minister Sikander Bakht had given an assurance in Parliament at the peak of the stand-off between the two partners that the government would not sell its stake in MUL.

Golden Share in PSUs mooted

NEW DELHI: The Department of Disinvestment has suggested amendment to Companies Act to provide for a "Golden Share" to allow government to go below 26 per cent stake in blue chip public sector enterprises, a top official said.

"If you divest, then you should divest 100 per cent and keep a Golden Share. Why should I lock up my money in, if I can have the same influence through a Golden Share. In India, however, the Golden Share is not there in the Companies Act," Disinvestment Secretary Pradip Baijal told PTI.

He said the department was trying to create a Golden Share through an amendment to allow government to go below 26 per cent stake in PSUs but still protect its interests. "I keep my money in a company because I want to keep a watch. If I can watch that interest with one rupee, why not?" he said.

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Golden Share concept allows government to have a vet over specified or significant changes in constitution or articles of association of a company. Baijal said Golden Share was needed since Finance Minister Yashwant Sinha had announced in his Budget speech that government could go below 26 per cent in PSUs on a case to case basis.