NEW DELHI: Speeding up the process of exiting loss-making public sector units, Commerce and Industry Minister Piyush Goyal on Tuesday said the government has all the options available for shutting down or merging state-owned trading companies such as State Trading Corporation (STC), Project and Equipment Corporation (PEC) and MMTC one-by-one.
“The government should not run companies only for gold imports and have huge infrastructure for the same. We have started the discussion and will close them down one-by-one. The companies have not covered themselves with glory,” Goyal said. All three companies are under the administrative control of the commerce ministry.
Following the minister’s statement, STC slumped 19.61 per cent to Rs 107.40 while Metals and Minerals Trading Corporation (MMTC) tumbled 16.57 per cent to Rs 20.65 on the BSE.
STC and PEC are debt-ridden firms. According to STC’s annual report for 2018-19, the company is facing “severe liquidity crisis” as all the lender banks have reported STC’s account as NPA due to "non-payment of interest on the banking limits availed by the company”. Moreover, it reported a loss for the fourth consecutive quarter in the April-June period.
STC was set up in 1956 as a trading arm of the government to undertake trade with east European countries. PEC was incorporated as a subsidiary of STC in 1971 to handle canalised business of export of railway and engineering equipment.
MMTC is the canalised agency for export of iron ore, manganese ore and chrome ore. Presently, MMTC is one of the nominated agencies for import of gold and silver.