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Calcutta HC puts Jessop privatisation on hold

A court has put on hold till April a government decision to privatise state-run engineering firm Jessop and Co Ltd, following a petition by workers opposing the sale, the employees' lawyer said on Friday.

In February, the cabinet panel on privatisation approved the sale of a 72-per cent government stake in loss-making Jessop to a private firm, Ruia Coatex, for Rs 181 million.

Divestment Minister Arun Shourie said last month the sale would be subject to clearance by the Board of Industrial and Financial Reconstruction.

"The Calcutta high court on Thursday asked the BIFR not to give effect (to any decision regarding the restructuring of Jessop) for four weeks," the counsel for the employees, Samaraditya Pal, told Reuters on Friday.

The next hearing on the privatisation of the Kolkata-based firm would take place after three weeks, Pal said.

Set up in 1788, Jessop was once one of Asia's premier heavy engineering firms mainly producing railway wagons, but labour problems and shrinking sales have pushed it to near collapse.

Jessop, which has a 1,500-member workforce, has accumulated losses of Rs 3.72 billion.

India's decade-old privatisation programme got a strong push in February when the government sold controlling stakes in a telecom company and an oil retailing firm, besides Jessop.

The government has so far raised nearly Rs 60 billion through the sale of stakes in state firms but is far short of its target of Rs 120 billion for the financial year ending March.

The government will retain a 26 per cent stake in Jessop after the privatisation.

YOU MAY ALSO WANT TO READ:
The Divestment Development
The Rediff Budget Special
The Rail Budget 2002-03
The Economic Survey 2001-02
Run-Up To The Budget
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