Sterlite grabs stake in Balco for Rs 551.5 cr

Sterlite grabs stake in Balco for Rs 551.5 cr

Asked if Alcoa and Birla promoted Hindalco Industries were the other shortlisted bidders considered by government, Shourie declined to comment and said "Strelite was the highest bidder."

BALCO, which posted a net profit of about Rs 60 crore last year, is the first profitmaking PSU where government has sold majority stake in pursuance of its declared policy of privatisation and limiting the role of state in only crucial and stratgic sectors like defence and railways.

The Sterlite bid was recommended by the committee of secretaries which compared four types of valuations- designated cash flow, comparable valuation method,balance-sheet method and asset valuation, Shourie said.

The shareholders' agreement will provide for job security of about7000 employees. ``There will be no retrenchment in the first year. After one year, the voluntary retirement scheme will be as generousas prevalent today,'' Shourie said. Trade Union leaders have expressed satisfaction that their concerns were addressed.

The Minister clarified that the government would continue to retain an overwhelming share of 49 per cent in the profit-making aluminium major.

Referring to allegations of lack of proper valuation by the INTUC-affiliated Balco Employees' Union, Chhattisgarh Forest, Environment and Tourism Minister D P Dhritalahare wrote to Union Mines Minister Sunderlal Patwa that it would be in the interest of justice and the public at large to have a proper inquiry into the whole issue before going ahead with the PSU's disinvestment process.

Chhattisgarh Minister of State for Industry and Agriculture Vidhan Mishra also wrote a similar letter to Patwa. He asked for revaluation of the PSU.

The Balco Employees' Union also claimed that the Madhya Pradesh government had allotted 1650 acres of land on a 99 year lease to the government enterprise, which under schedule five of the Indian Constitution is a special tribal land that cannot be transferred to anyone other than a government organisation.