New Delhi (13.10.2023): A review meeting to take a call on closure of central PSUs -- Metals and Minerals Trading Corporation of India (MMTC), State Trading Corporation (STC) and Project & Equipment Corporation of India Limited (PEC) -- has been scheduled for October 23, 2023 under the chairmanship of Minister of Commerce and Industries, Consumer Affairs, Food and Public Distribution and Textiles Piyush Goyal. All concerned officials and a battery of legal experts, including MMTC advocate Rushab Aggrawal and others, have been sounded to block their schedules.
This is to recall that Sebi had cancelled licence of MMTC Ltd in August 2023 as a stock broker for its involvement in illegal ‘paired contracts’ in a case related to National Spot Exchange Ltd (NSEL). MMTC traded in “paired contracts", which did not have regulatory approval. One month after MMTCs licence was cancelled, the Union Ministry of Commerce & Industry decided to de-notify three Central Public Sector Units (PSUs) -- MMTC, STC and PEC as nominated agencies for imports and exports of goods like high-grade iron ore and precious metals. After de-notification, these companies no longer remained canalizing agencies for the import and export of goods for the government.
The move was looked upon as the beginning of the process of closure of MMTC, STC and PEC. MMTC and STC were incorporated in 1963 and 1956, respectively whereas PEC Ltd was carved out of the STC in 1971-72. The ministry has made it clear that their utility was examined well and the ministry firmly believes that there is no need for any canalizing agency in the department of commerce.
The ministry had then said, “It is also relevant to mention here that keeping in view the guidelines of Department of Public Enterprises on New Enterprise Policy for CPSEs in the non-strategic sector, the proposal for closure of MMTC, STC, and PEC is under consideration”. Under the current foreign trade policy (2015-20), there are seven nominated agencies for the import of precious metals which includes four from the department of commerce — MMTC, STC, PEC Ltd, and STCL Ltd. The Union Cabinet had approved the closure of STCIL, a subsidiary of STC, in 2013 and its winding up petition is pending in the Karnataka High Court.
MMTC was a canalizing agency for the import and export of high-grade iron ore, manganese ore, chrome ore, copra, and red sanders and the import of precious metals. STC was a canalizing agency for imports of essential items of mass consumption such as wheat, pulses, sugar, and edible oils whereas PEC was engaged in the export and import of machinery and railway equipment.
However, the ministry had made it clear that their utility was examined well and it was believed that there is no need for any canalising agency in the department of commerce.
