Any sale of government equity in Shipping Corporation of India (SCI) can happen only after a nod from Parliament, feels the ministry of shipping.
"If something is done by an Act of Parliament, it should be changed as per an Act of Parliament," a government official told Business Standard. SCI was created through legislation, through nationalisation and amalgamation of private companies. "We are, therefore, examining the legal aspect and only then would go ahead with the proposal (to divest in SCI)," said the official.
This is similar to the case of the previous NDA government's proposal to privatise Hindustan Petroleum Corporation and Bharat Petroleum Corporation, in 2003. The Supreme Court had then ruled out privatisation in these companies without prior Parliament approval -- these entities were created by Acts of Parliament.
Government think tank NITI Aayog has proposed strategic sale of about 26 per cent stake in SCI, which could fetch Rs 960 crore to the exchequer under current market conditions. The government holds 63.75 per cent stake in the company. A 26 per cent stake sale would mean it legally becomes a private company.
It was established in October 1961, by amalgamation of Eastern Shipping Corporation and Western Shipping Corporation. SCI has interests in various segments of the shipping trade. Standalone profit was Rs 92.4 crore for the March quarter, down 59 per cent from the year-ago period. Total income fell to Rs 948 crore, from Rs 986 crore in the corresponding period of the previous year.