THIRUVANANTHAPURAM: Central government has barred the state government from acquiring Hindustan Latex Limited (Hindustan Life Care), which sells shares, as part of the privatization of central PSUs. The state cabinet has directed Chief Minister Pinarayi Vijayan to write a letter to the Prime Minister conveying its displeasure over the Centre's stand.

When the Centre included HLL Life Care in the sale of shares, the state government agreed to acquire it. The state government also issued an order directing the KSIDC to participate in the share auction of HLL institutions in Kerala and take over the assets. However, the Union Finance Ministry said that as per the Centre's share sale policy, neither the state governments nor the government's public sector undertakings could participate in such tenders. Shares cannot be transferred to central or state governments or to government-controlled companies or societies. The central government issued a letter yesterday informing about this.

The next step for KSIDC is to look into the legal possibility of participating in the central government auction and acquiring the company's assets in Kerala.

Newsprint Factory: Kerala Model

Recently, Kerala had obstructed the Centre's privatisation by taking over the Vellore Newsprint Factory by settling the Centre's liability. As per the plan submitted by the company to the Law Tribunal, the state government had settled a liability of Rs 145.60 crore, including workers' benefits. In 1974, the state government had handed over 700 acres for the factory and 5000 acres of leased land for the maintenance of raw materials to the centrally owned Hindustan Paper Corporation. Thanks to the willpower of the LDF government, Kerala got back this land, which was to be handed over to the private sector.