Press
Release
The
CPI
(M)
asserts
that,
it
is
the
money
of
the
people
of
India
which
has
created
Navratna
PSUs
like
ONGC
and
GAIL
and
the
Govt.
of
the
day
is
only
a
caretaker
and
proxy
shareholder
of
the
national
wealth.
NDA
Govt.
has
no
right
to
liquidate
these
assets
at
sunken
price
to
cover
up
their
financial
profligacy
and
rickety
state
of
finance.
NDA
Government
started
its
term
with
selling
of
25%
of
GAIL’s
share
in
Nov.
99
at
a
throw
away
price
of
Rs.70/-
per
share,
majority
of
which
were
acquired
by
M/s
British
Gas
&
Enron,
competitors
of
GAIL,
and
is
ending
its
term
with
another
dirty
deal
of
selling
grossly
under
priced
shares
of
India’s
national
prestigious
companies
like
ONGC
and
GAIL.
Without going into the irrationality of disinvesting/privatising profitable and strategic PSUs for making up budgetary deficit, IPO offerings of ONGC and GAIL has cost the nation a loss of Rs.5000 to 6000 crores on a conservative estimate on account of underpricing of shares. In the case of ONGC & GAIL, the Price Earning Ratio is ranging from 9 to 10. {For ONGC the Earning per share was Rs.74 approx in 2002-2003 and for GAIL it was Rs. 19.38. Price offered per share for ONGC is in band of Rs.680-750 and for GAIL it is Rs.185}. ONGC, a Fortune 500 company and GAIL, the only gas transportation company in the country, are having a large equity base compared to private companies and huge reserves as well. The international value of such oil-gas based assets in terms of price earning ratio would not be under any circumstances less than 15 if not 20. How much does the country lose? Based on a minimum price earning ratio of 15, the under pricing would be in the range of Rs.5000 to 6000 crore for sale of 142 million shares of ONGC and 84 million shares of GAIL. Yet this is being tomtomed as another shining glory by the Govt.
Govt’s annual earning from ONGC and GAIL Is more than the one time sale of 10% share:
In
2002-03,
ONGC
paid
Rs
3798
crore
as
dividend,
Rs
4500
crore
as
cess
(at
the
rate
of
Rs
1800/-
ton
of
oil
produced
while
the
private
oil
producing
companies
are
exempted
from
paying
the
cess)
and
Rs
12,377
crore
as
Central
Government
duty
and
taxes
(excluding
Sales
Tax
paid
to
the
State
Governments.
GAIL
paid
Rs
427
crore
as
dividend,
and
Rs
1302
crore
as
Central
Government
duty
and
tax.
Thus
for
the
year
2002-03,
ONGC
&
GAIL
paid
Rs
8725
crore
as
dividend
and
cess
and
Rs
13,679
crore
as
Government
duties
and
tax.
And
still
the
Government
boasts
of
one
time
sale
for
Rs
11000
crore
of
assets
which
fetches
Rs
22,000
crore
per
year
to
Government
exchequer!
Price
of
IBP
share
–
from
Rs
1551
to
Rs
620
per
share!
When IBP disinvested through strategic sale route in February 2002, IOC another PSU, purchased 33% of government shares in IBP at a cost of Rs 1551 per share. Later IOC purchased 20% share of IBP from market at the same price per share. Now the same Government which had approved purchase price of Rs 1551 per share, only two years ago, is now selling govt’s remaining 26% shares in IBP at a price of Rs 620 per share.
If this is not a scam, then what else it is?
CPI(M)
appeals
to
the
Hon’ble
President
of
India
who
actually
holds
the
share
on
behalf
of
the
people
of
India
to
seek
explanation
form
the
caretaker
Govt.
on
the
national
loss
from
this
sale
at
the
expense
of
the
taxpayer
and
to
put
a
hold
on
the
share
transaction
and
order
for
an
enquiry
about
these
dubious
deals.
The loquacious Disinvestment Minister owes an explanation to the nation for suppressing information regarding the identity of the bear cartel share market operators who as per his information, had hammered the share market, warranting his intervention during the recent disinvestment IPOs. The Minister claimed he knew them but did not name them. It is not a private matter between the Minister, the Government and scam stars. People of this country who have suffered immensely because of the share market scams, have the right to ask the Minister to share his information with the nation so that punitive action can be taken against those who are involved. Otherwise it can be presumed that there is a nexus between the Government, share market operators speculators and FIIS for manipulating the market where India’s pride - its national oil companies like ONGC & GAIL are being bartered for a song.
ONGC
&
GAIL
–
irreplaceable
national
assets
CPI(M)
further
ridicules
the
hullabaloo
created
on
reported
fund-parking
by
FIIs
or
investors
like
Buffet
or
Sores
in
ONGC
and
GAIL.
ONGC
has
not
become
a
fortune
500
company
on
certification
of
FI
and
FIIs.
It
has
become
a
global
major
because
of
its
own
strong
fundamentals
created
by
sweat
and
money
of
people
of
India.
So
is
GAIL.
They
are
there
in
spite
of
Vajpayees,
Shouries
and
not
because
of
them.
Fis,
FIIs,
and
speculators
are
eyeing
them
for
“creeping
acquisition”
of
these
irreplaceable
national
assets
–
the
Navratnas.
It
is
a
matter
of
shame
that
instead
of
protecting
such
assets,
Govt.
is
gloating
over
their
acquisition
by
foreign
investors.
Data
Sheet
Shares
offered
for
sale
-
142.51
million
(10%
of
total
holding)
Offer
Price
-
Rs.680-750
per
share
Earning
per
share
-
Rs.
74
(in
year
2002-2003)
Price
Earning
Ratio
-
9.2
to
10.1
Expected
earning
from
this
sale
-
Rs.9690
crore
to
Rs.
10,875
crore
Govt’s
share
after
disinvestment
-
74%
Shares
offered
for
sale
-
84.6
million
(10%
total
holding)
Offer
price
-
Rs.185
per
share
Earning
per
share
-
Rs.19.38
(in
2002-2003)
Price
Earning
Ratio
-
.9.5
Expected
earning
from
this
sale
-
Rs.1565
crore
Govt.
share
after
disinvestment
-
57%
(25%
were
earlier
disinvested
in
November
99)
Dividend
paid
to
Govt.
of
India
(Rs.
Crore)
2003
ONGC
3798
GAIL
427