Coal ministry readies disinvestment pre-requisites for Coal India

The coal ministry has asked the opinion of the law ministry in order to provide the some stake to the people who lost their land for mining purposes and the employees when it finalises the Coal India disinvestment agenda. While the government has in-principle accepted the disinvestment proposal of the company, a formal approval is yet awaited.

Another issue still to be finalised is the amount of stake to be sold. While the initial proposal by the coal ministry was for selling 10% stake, the government has also been evaluating a 15% disinvestment option. A final decision in this regard is likely to be taken by the Cabinet Committee on Economic Affairs after consulting the technical sources.

The coal ministry wants that some of the disinvestment stake should go to its employees, particularly lower rank ones, and those people who lost their land for the mining operations of the company. However, there might be some legal issues in achieving such an outcome, for which the ministry wants the opinion of the law establishments.

With regard to valuations, the ministry has approached the Department of Disinvestment for determining the price value of company’s shares. The coal ministry has also written to the Public Enterprise Selection Board for appointment of additional full-time directors as it would need seven of them compared with four now, as a pre-requisite for coming out with an IPO.