‘HAL share buybacks, dividends left it poorer by ₹15,500 crore’
HAL Employees Association’s S. Chandrasekhar says Hindustan Aeronautics Ltd paid ₹6,393 crore to the government in two share buybacks and ₹9,000 crore in dividend at a time it didn’t have enough money to pay salaries to staff
Bengaluru: As acrimonious exchanges continued over the alleged neglect of Hindustan Aeronautics Ltd (HAL), a top leader of its employees claimed Wednesday that the public sector undertaking got poorer by nearly ₹15,500 crore because of the dividends and share buybacks it made to the centre from 2003 to 2018.
S. Chandrasekhar, the general secretary of HAL Employees Association, said the government-owned aerospace and defence major returned ₹6,393 crore to the government in two share buybacks for the first time in its history. It also paid ₹9,000 crore by way of dividend between 2003-2004 and 2017-18 when the company did not have enough money to pay salaries to its staff.
“So, in total nearly ₹15,500 crore has been taken away from us,” Chandrasekhar told the Press Trust of India.
HAL reportedly ran up an overdraft of ₹962 crore recently to pay salaries to its staff.
Chandrasekhar’s remarks came ahead of defence minister Nirmala Sitharaman’s meeting scheduled for Wednesday with HAL chairman R. Madhavan and three services chiefs relating to payments and production orders for the PSU.
The government and main opposition Congress are locked in a slugfest over the stressed finances of HAL. Congress president Rahul Gandhi had on Saturday alleged that Sitharaman “lied” in Parliament that government orders worth ₹1 trillion were given to HAL, and demanded that she either place the documents in support of her claim made in the House or resign.
Gandhi’s attack came after a media report claimed that “not a single rupee of the said ₹1 trillion has come to HAL, since not a single order, as claimed, has been signed till now”.
The report cited senior HAL management officials in order to back its claim.
Gandhi has also accused the government of discriminating against HAL in the Rafale fighter jet deal and facilitating an offset agreement between Dassault Aviation SA, the manufacturer of the aircraft, and an Anil Ambani-promoted company.
Chandrasekhar said the two share buybacks were executed in the last three years, with the first for ₹5,265 crore in 2015-16 and the second in 2017-18, when HAL paid the central government ₹1,128 crore. He said though there was nothing wrong with share buybacks, it should not have been done when the company’s resources were under strain.
“Buyback, in a way, is good, but right now the company is facing financial crunch. Who is going to bail us out? They are telling us to avail loans when our dues are pending and the ministry of defence is yet to place orders,” he said.
According to some reports, the Indian Air Force (IAF) owes ₹14,500 crore in outstanding dues to HAL.
Noting that taking loans continuously was “unsustainable”, Chandrasekhar said that the finance department of HAL had written to the defence ministry several times in the last six months for clearing the dues without any success.
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