Not only stake, Govt. should divest management control as well: Ravi Todi

Privatisation of public sector undertakings, to cross-sections of people, appears to be the ‘be all and end all’ of all that the government is confronted with today. Fiery exchanges of arguments are almost a regular feature seen in the floor of Parliament. But the moot question is will mere divestment of stakes in PSUs would allure the investors or something more to be added to the offer. Yes. The government must seriously consider decontrolling of the management as well. Stakeholding without management control has no meaning, says Mr. Ravi Todi, president of the Merchants’ Chamber of Commerce. In an interview with the tendertimes.com, Todi underlines the need for changes in the existing labour laws and feels that the Central government should discharge this responsibility because it’s a national issue hence calls for a national framework.

Question: Do you support privatisation of all the PSUs, even the profit making ones?

Ravi Todi: The issue at stake is not full or part privatisation. The moot question is whether mere acquisition of 10 or 20% stake would mean anything to an investor who would like to turn the corner . I personally feel it would not serve any purpose unless I have absolute control of management because I feel that unless the management style is changed, unless the man-management relations is reframed to suit the need of the hour , unless I am allowed to manage my own house according to my plan and wishes, my investment cannot pay me any dividend except possibly some mental satisfaction that I am a stakeholder. Things are not very clear to me even today whether the government, while divesting stake, would also divest management control as well. That’s a very big question that has to be answered first. Take for example the case of Air India. Will it be mere divestment of some government stake or its both equity and management control? Why the Singapore Airlines or X Y Z will put in money there? Can you tell me ?

Q: In some cases, it has been seen that government is not getting any partner despite offering 51% stake or more than that. Why it is so?

Ravi Todi: One of the conditions that the government is imposing on the prospective buyers of ailing PSUs is that labour rationalisation would be allowed without tears. Even before taking any disinvestment decision regarding any PSU government is sitting with the labour unions and assuring that there would be no retrenchment, there would be chamnge in ownership only. Who will take the liability of additional workforce. Henec, I personally feel and that is also the feeling of the cghambers of comerce as well that the existing labour laws should be changed suitably to match the changing global scenario.

Q: Those PSUs, which have right kind of management, right kind of approach and earning lots of profit, should those be privatised too — totally or partially?

Ravi Todi: As such there is nothing wrong if a government sells some stakes of profit making PSUs. Massive funds are blocked in ailing PSUs. On the other hand, the healthy and profit making ones require more and more funds to upgrade and expand their activities. The profit-making units would naturally attract premiums on their scrips and it would not affect the government anyway if it divests 10 or 15% stake. People see good investment value in that. If I am investing Rs 200 in such a company, I know that the company has potential and its stocks would go up to Rs 400 today or tomorrow.