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`Decision to renounce TIDCO rights was correct'

By Our Special Correspondent

CHENNAI NOV. 6. The decision of the previous AIADMK government to renounce TIDCO's rights to the zero conversion bonds of the joint sector SPIC was correct, a former Tamil Nadu Chief Secretary told a special court today.

Deposing before R.Rajamanickam, Special Judge-I, in the case of `SPIC disinvestment scam', T. V. Venkataraman said the renunciation of rights was a policy decision, taken after considering the financial interests of the State. As Chief Secretary, he was convinced that the Government stand was correct, Mr.Venkataraman said during cross-examination by defence.

With the completion of examination of Mr.Venkataraman, who was the 13th witness examined, the case was adjourned to November 10 for recording the investigating officers' evidence.

Mr.Venkataraman said there was no scope for the Government to appoint its nominee SPIC Chairman. By an order in 1970, it accepted the Articles of Association of SPIC and also agreed to the proposal that the joint sector promotee be the Chairman. Accordingly, M.A.Chidambaram (since deceased) was elected Chairman. No government order was issued subsequently to enable the Government to have its nominee as the company head. He recorded in the note file that it would be desirable to retain the Government's interest in the company at 26 per cent only with a view to maintaining the number of government directors on the board. The decision to disinvest contained two safeguards: to fetch at least 100 per cent of the bond value and to maintain the same strength of directors from the government side. The strength, which was four, was maintained even after renunciation of the TIDCO's rights.

The State's financial position was tight at that time. Hence, it was decided not to subscribe to the ZCB (by TIDCO). When he recorded in the file that the Chief Secretary need not be posted as Chairman and that the board itself might elect its Chairman, (which he stated during chief examination), he took note of one of the articles in the Memorandum of Association, which said the board of directors might from time to time elect one of their body to be the Chairman.

He saw the file on disinvestment on different dates in March 1992. Between these dates, various developments took place. The formula suggested by the TIDCO Executive Director was accepted. The Finance Secretary also approved the formula and the valuation by the TIDCO at Rs.12.37 crores for the rights of renunciation. When the Finance Secretary approved and specifically recommended the approval of the valuation, there was no need for any further discussion, Mr.Venkataraman said.

Earlier, during chief examination, the witness said that when his orders were sought for posting him as Chairman, he differed with the suggestion on the ground that the Chief Secretary was under work pressure. It was his view that senior level officers, such as the Chief Secretary, need not be posted as Chairman of joint sector companies. So, he was not posted as SPIC Chairman and the then Vigilance Commissioner was appointed.

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