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Asset valuation of Balco questioned

Our Bureau

NEW DELHI, Feb. 21

EVEN as the Government has approved the sale of 51 per cent equity in Bharat Aluminium Company Ltd (Balco) to Sterlite Industries, rumblings have already started over the ``lack of transparency''and ``questionable asset-valuation methodology''.

The first salvo was fired by Mr Dipankar Mukherjee, Member of Rajya Sabha, who in a letter to the Minister in charge of the Disinvestment Department, Mr Arun Shourie, has sought the re-valuation of Balco, under the overall supervision of the CAG and that the reserve price so determined be placed in Parliament to clear all doubts about distress sale.

Mr Mukherjee has noted that the authorised valuer for asset valuation, Mr P. V. Rao, spent just 10 days to finalise his report. He visited Korba unit from 31 January to 4 February and visited Balco's Bidhanbag unit at Asansol on 5 and 6 February. It was difficult to understand how the valuation had been attempted within a span of 10 days, he pointed out.

He said that even reputed consultants with a proven expertise aided by back up data would take much more time in undertaking the study of a plant for assessing the re-use value after ascertaining the residual life of the plant and machinery.

``In other words, a minimum time is required for technical evaluation before assessing the sale value and that too by a multi-disciplinary agency having proven track record in such an assignment. Under these circumstances, it is important to allay appreh ensions about a tutored valuation with a pre-determined objective of undervaluing the asset to suit some chosen bidder,''he said.