Don't give Hindustan Zinc's residual stake to Vedanta: Minister

New Delhi: Accusing Vedanta of ill-treating employees of Hindustan Zinc's Vizag facility, a Union Minister has asked Prime Minister Manmohan Singh not to sell residual government stake in the company to the Anil Agarwal-led Group.

Minister of State for Commerce & Industry D Purandeswari countered claims made by Vedanta group that HZL was in losses and it was moving employees from its units in Visakhapatnam - her constituency, to Rajasthan units saying the Group Chairman Anil Agarwal had recently reportedly said that the company has turned around is now profit making.

"For over two months now employees (of Vizag plant) have not been paid their salaries, which I consider is a coercive method to lay off employees," she wrote in a letter to Singh.

The Minister said when accosted, company representatives told employees that HZL was incurring losses and would consider transfering willing employees to its Rajasthan facility.

"This offer, to me, is short of being ridiculous as employees will not leave their families behind Andhra Pradesh and go to work and live forever in Rajasthan. This is again a ploy to convince the employees to leave Hindustan Zinc," she said.

When contacted, HZL in a statement said since zinc metal production in the facility has been stopped for the last 12 months, the company decided to transfer employees to other operational units in Rajasthan.

Vedanta Group had acquired government's majority stake in HZL and talks are on to sell the government's remaining 29.54 percent stake in the company to Vedanta.

Purandeswari requested the Prime Minister not to sell the stake to Vedanta as this would negatively impact "interests and lives" of the HZL employees.

"I appeal to you sir to ensure that the interests and lives of this large number of people dependent on monthly salaries are protected by our government by not allowing the disposal of the residual stake and by ensuring that HZL continue its operations in Visakhapatnam," she said.

"I make this plea in the interests of hundreds of employees and seek your intervention and protection," she added.

In its statement, HZL said the 56,000 tonnes per annum Vizag plant has been seeing a continuous decline in production in recent years and it got further aggravated due to power situation in Andhra Pradesh.

"The Company also took a view on expansion but even that could not become possible considering that it falls in "Critically Polluted Zone" as identified by CPCB/MoEF.

"Considering all aspects, the company decided to transfer employees to other operational units in Rajasthan. Employees who were not willing for transfers have been offered an attractive VRS. 32 employees readily opted for transfer and have already joined various locations," HZL said.

PTI