End of road for HZL staff, No say in HZL affairs, says Patel to Purandeswari

By SNV Sudhir

Visakhapatnam, July 4, 2013:  Much to the disappointment of the agitating workers union mines ministry had refused to interfere in the day to day affairs of Hindustan Zinc Limited citing disinvestment done in the company in 2002.

The HZL management stopped production at its smelter unit since last February and asked its employees to join their mining sites and various offices located in Uttaranchal, Uttar Pradesh, Madhya Pradesh and Uadaipur in Rajasthan or opt for Voluntary Retirement Scheme (VRS).

While few joined their respective postings, majority of them stared  protests since then terming the transfer orders and  abrupt closing of the smelter as illegal. As the deadline for transfers ended on March 11 this year, they have also stopped receiving salaries.

Workers alleged that without any valid reason HZL, in which Vedanta has nearly 65 per cent stake, stopped production putting their social security at risk. Since then workers had formed a joint action committee protesting the moves of Vedanta group.

At present there are around 220 employees who were protesting at the HZL gate since very long erecting a tent. They have also erected a tent near the factory and launched agitation since more than 6 months.

Union mines minister Dhinsha Patel recently wrote to the local MP and union minister of state for commerce and industry, D Purandheswari, who was representing workers cause, explaining the limitations of the government in issuing any direction to the HZL management. Purandheswari met Dhinsha Patel several times earlier and asked him to issue directives to the HZL management to reopen the smelter and cancel the transfer orders.

Patel said that union government is now holding only 29.53 percent shares in HZL. And there is no provision in the Share Holder Agreement (SHA) or Share Purchase Agreement (SPA) signed between union government and Vedanta controlled Sterlite Opportunities and Ventures Ltd (SOVL) at the time of disinvestment in 2002, to have any say in the affairs of the company and issue directives to the management.

“Ministry of corporate affairs which was consulted regarding the powers of the government as a minority shareholder in the company, have observed that the government can’t intervene in the day to day affairs of the company,” he said and added that in the absence of any powers under the law with regard to the day to day affairs of the HZL, it may not be possible for the government issue directives to the company which may lead to avoidable embarrassment.

The union mines minister also said that based on the Board Resolution initiated by a government nominee director, HZL has got a third party assessment regarding running the zinc smelter plant by L& T. After detailed examination, the experts technical committee of L & T observed that ‘based on the observations made during the visit, it is felt that the present condition of plant is not healthy or safe to run’

However Purandheswari found fault with the report submitted by L& T.        “There is an ample scope for doubting the impartiality of the L& T as none of the other stakeholders like state government or employees were consulted.  It appears that the study was silently done to safeguard the interests of the Management at the cost of the interests of the area and the employees,” she said

Purandheswari further added that even though, being the minority stakeholder government cannot intervene in day to day affairs but when it is the larger issue of closure of the Plant and the livelihood of hundreds of employees and the issue of deindustrialisation of the area, the government should find the ways and means to intervene.