Even as the Centre is yet to appoint valuers and bankers to carry out the R15,000-20,000 crore worth residual stake sale in Hindustan Zinc and Balco, officials say that for the sake of transparency, the finance ministry is in favour of taking the offer-for-sale (OFS) route for the eventual stake sale.
To that effect, the disinvestment department has written to stock market regulator Sebi seeking permission to sell its 49% stake in Balco, which is unlisted. The stress on transparency is a result of the long- drawn disinvestment saga for the two companies, which involved the the Prime Minister's Office, the Attorney General, finance ministry, mines Ministry, law Ministry, the CBI, and recently, the Supreme Court.
An OFS would be the preferable route to divest the centre's 29.5% stake in HZL, since it is listed.
“In an OFS, the the names of bidders and the buyers are recorded and made public through the exchange, hence we have written to Sebi seeking its permission for such a route for Balco,” said a senior finance ministry official, underlining the levels of caution that the finance ministry is willing to take.
However, experts say the regulator may not give its nod for Balco. “It is unlikely that Sebi will approve of such a proposal. Saying 'yes' to such a move implies that Sebi has jurisdiction over unlisted companies, which it actually does not,” said former Sebi member MS Sahoo.
The government holds 29.5% HZL and 49% in Balco. Anil Agarwal's Vedanta Resources acquired the majority shareholding of the two companies in 2003 from the central government. The residual stake-sale was originally part of former finance minister P Chidambaram's FY14 disinvestment target of R54,000 crore. However, the ministry of mines objected and said such a deal would require parliamentary approval and the amendment of the Metal Corporation (Nationalisation and Miscellaneous Provisions) Act, 1976.
The differences of opinion between North Block and the mines ministry required intervention from the former PM Manmohan Singh, even as the views of the law ministry and ex-attorney-general Goolam Vahanvati were sought multiple times.