Furore over BALCO deal

By Our Special Correspondent

NEW DELHI, FEB. 22. The sale of a majority shareholding in the Bharat Aluminium Company Limited (BALCO) to Sterlite Industries sparked a furore in the Rajya Sabha even as Disinvestment Ministry sources sought to clarify that the deal and company valuation were completely above board. The Opposition led by the CPI(M) forced adjournment of the House for the day after lunch and the issue also figured in the Lok Sabha.

In the Upper House, the matter cropped up immediately after question hour with Mr. Kapil Sibal (Congress) and Mr. Jibon Roy (CPI-M) seeking to put on hold the transfer of assets till a discussion was held on the subject. The RJD members also joined the protest.

Such was the determination of the Opposition that the External Affairs Minister, Mr. Jaswant Singh, could not make a statement on the extension of ceasefire in Jammu and Kashmir as the House was adjourned twice by the Chair before lunch break.

The Opposition's charge received a boost when the Telugu Desam leader, Mr. C Ramachandraiah, demanded that the Government refer the deal to the Comptroller and Auditor-General of India before finalising the deal. While the TDP was not against disinvestment, it wanted a transparent method and said the objective must be to ensure maximum price for it. CPI(M) members insisted that the Government give an assurance that the transfer of assets would not be effected before a discussion in the House, as it would otherwise become ``infructuous''.

Mr. Jaswant Singh said the Government was willing for a discussion but it was for the Business Advisory Committee to allot time. Later, the Disinvestment Minister, Mr. Arun Shourie, said he was prepared for a discussion even tomorrow but was unwilling to keep the decision on hold by ``bulldozing tactics'' of the Opposition.

Mr. Shourie said the charges made by Opposition members was at `variance with facts' and that the process to sell BALCO was going on since 1997 while actual work began two years ago.

Disinvestment Ministry sources also pointed out that the company's book value was Rs. 704 crores of which 51 per cent was Rs. 359 crores, well below the winning bid of Rs. 551.5 crores. They stressed that Jardine Fleming, the global adviser, had carried out the three traditional methods of valuation - discounted cash flow, balance sheet valuation and industry comparisons. Asset valuation, the area of controversy, was done `for the sake of completeness', these sources said. The sources stressed that the bid received from Sterlite Industries was far in excess of the figures arrived at in the three accepted valuations. They also insisted there was no question of a `sell- out' as the Government retained 49 per cent equity and four Government directors would remain on the board as against five of Sterlite.

The Congress spokesperson, Mr. Jaipal Reddy, decried the deal as smacking of a scandal. He demanded that the Government suspend the transaction till Parliament was taken into confidence about the deal.

The BJP spokesperson, Mr. Vijay Kumar Malhotra, defended the decision as continuation of the Congress policies.

Jogi's threat

PTI reports from Raipur:

The Chhattisgarh Chief Minister, Mr. Ajit Jogi, today threatened to cancel the mining lease of the Bharat Aluminium Company's Korba plant, if the Centre did not reconsider its decision to privatise the company.

``Not only the mining lease, the State Government will also reconsider the lease of land and other facilities provided to the company if the Centre goes ahead with its plan of disinvestment,'' Mr. Jogi told reporters after a State Cabinet meeting.

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