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Govt to place BALCO documents before CAG

Tara Shankar Sahay in New Delhi

The government said that it would place all documents on sell off of the public sector aluminium giant BALCO to Sterlite Industries before the Comptroller and Auditor General to prove that the deal was done in a transparent manner.

Divestment Minister Arun Shourie on Friday asserted that the Opposition criticism on the divestment of BALCO was unjustified and that if anybody made a Rs 50-billion bid for it with earnest money of Rs 1 billion, he would cancel the BALCO transaction.

"Let someone make a Rs 50-billion bid with Rs 1 billion earnest money and I will accept it and cancel the BALCO transaction," Shourie told reporters, while replying to questions on the government's decision to offload its 51 per cent holding in favour of Sterlite Industries.

The entire deal was vetted by Committee of Secretaries after evaluation by senior officials of four ministries and an international consultant, Shourie said.

The entire divestment had been done in a transparent manner and once it was completed all the documents would be placed before the Comptroller and Auditor General (CAG) for its perusal, Shourie said.

"The divestment was entirely in consonance with what the Divestment Commission had recommended in its Fifth Report which had stated that the Government could consider offering 51 per cent or more to a buyer or a strategic partner," Shourie said.

To a question whether trade unions had been taken into confidence in the matter, he said: "We have had the fullest co-operation from them and at the last meeting with them on February 15, they expressed satisfaction over the manner in which the government had carried out the divestment."

The minister expressed regret that his "former colleagues from the media had given misleading reports about BALCO's assets, which had sent out patently wrong signals about the government and its intentions".

Shourie took exception at an Opposition member's contention that the Divestment Commission had warned against divesting BALCO.

"I must point out that the Divestment Commission, chaired by G V Ramakrishna, has written to my ministry that it may consider divesting 51 per cent equity of BALCO and this is the recommendation accepted by the government," he asserted.

He underscored that the Opposition member had quoted from a report which was four years old. Pooh-poohing the reports that BALCO had made Rs 1.10 billion profit this year, he said the process of divestment in BALCO had been on for the last four years and in the last two years, its profits had been steadily declining touching Rs 250 million for 2000-01.

However, Mohan Guruswamy, former officer on special duty to the Union finance minister, told rediff.com that even two years ago, 40 per cent of BALCO's equity had been valued at Rs 20 billion.

"This government is taking the people and the country for a ride. I maintain that even now, 40 per cent of BALCO's equity would be worth upwards of Rs 20 billion because by divesting 51 per cent equity to Sterlite Industries, the government is giving it total control," Guruswamy emphasized.

He also referred to divestment in the states and pointed out that Maharashtra and Madhya Pradesh had also taken the initiative in procedures relating to divestment.

Shourie praised the Madhya Pradesh Chief Minister Digvijay Singh, contending that the latter had even gone to the extent of borrowing Rs 1 billion from the Asian Development Bank to pay off some employees pertaining to the divestment process in the state.

Answering a question, he said that the Cabinet Committee on Economic Affairs had cleared 25 projects for divestment.

Shourie, however, did not want to speculate as to what would finally happen regarding the ongoing divestment of BALCO.

"The process is underway and that's that," he said.

BJP spokesman Vijay Kumar Malhotra said that his party had taken exception to the Chhattisgarh Chief Minister Ajit Jogi's recent statement that he would cancel the lease of BALCO's bauxite mines owned by the state government if the Centre went ahead with the proposed sale off the public sector unit.

"We condemn Jogi's threat to cancel BALCO's lease, it amounts to an assault on the federal character of the Constitution," Malhotra asserted.

He added that the central government, however, had recourse to constitutional means to tackle any such threat.

Asked to spell out what the constitutional recourse could be, Malhotra refused to elaborate, merely emphasizing that the Constitution was available to take care of such issues.

SEE ALSO:

Govt to sell 51% BALCO pie to Sterlite

BALCO selloff rocks Parliament again

Price for BALCO just right, says Sterlite

Budget 2001

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