The High Court of Karnataka on Tuesday ordered issue of notice to the Centre on a PIL petition questioning the decision to privatise BEML Ltd., a public sector undertaking, by way of ‘strategic disinvestment’ of 26% equity out of the Government of India’s total 54.03% shareholding in the company.
A Division Bench comprising Chief Justice Ritu Raj Awasthi and Justice Suraj Govindaraj passed the order on the PIL petition filed by four staff and employees’ associations of BEML.
The petitioners have questioned the ‘in-principle approval’ given by the Union Government on October 27, 2016 for ‘strategic disinvestment’ of shareholding in BEML, and also the expression of interest invited on January 4, 2021 in the form of preliminary information memorandum.
It has been pointed out in the petition that the company, which began with the investment of ₹5 crore in 1964 and has achieved a turnover of nearly ₹3,500 crore in the present times, is in fact one of the most profitable PSUs of the country and therefore this is not a case of the Government selling a loss incurring PSU.
“If BEML is allowed to be privatised, the Ministry of Defence will lose control over any of its companies and the entire production will go out of control of the Ministry, resulting in threat to the security of the nation,” the petitioners claimed.
“Loss of Government control over policy and production of defence hardware and expendables by privatisation of defence PSUs is a flawed national strategy. Even if it makes business sense to go for ‘strategic sale’ of these public assets to a ‘strategic partner’, it is empathetically submitted that the national interest is about sovereignty and security and not business profits,” the petitioners have argued.
It has also been contended in the petition that privatisation of BEML may not only lead to the concentration of economic power in a few private hands but may also result in retrenchment of workers as the change in ownership from public to private usually means losing a status resembling that of a civil servant to become a private sector employee with no guaranteed job security.
