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DoD asks for Balco valuation details

Sandip Das

With the Comptroller and Auditor General asking the department of divestment to furnish further details of the valuation of assets of Bharat Aluminium Company, the aluminium major's sale can once again snowball into a controversy.

Sources told Business Standard that it was not clear whether the valuation exercise undertaken prior to the sale of 51 per cent stake in Balco included all the assets.

The DoD has asked valuator P V Rao & Associates to check if the 270 mw captive power plant and the sheet rolling shop were included in the valuation exercise.

The department has also asked the valuator to provide valuation details of the mines in Manipal, Amarkantak and Kawardh.

The government is understood to have asked P V Rao & Associates to submit the working sheet of the asset valuation report which will be passed on to the audit party.

It is learnt that the valuators had earlier informed the Central government that they were not in a position to undertake valuation of Balco's mines and quarries.

The DoD has also asked the valuator to submit a certificate stating that all the capital assets of Balco have been included in the valuation report as also the method adopted in ascertaining the residual life and the valuation of various assets belonging to Balco.

The officials also said that in case of mines owned by Balco, the valuator has said that the percentage share of cost break down for alumina in the total cost analysis of aluminum production was taken at 38 per cent.

Similarly, the percentage share of cost break down for bauxite in alumina was taken at 10 per cent. "The government has asked the valuator to furnish the details of working out the percentages," said an official.

Divestment minister Arun Shourie has said the government will pass on all the details of divestment transactions undertaken by it to the CAG and the chief vigilance commissioner for scrutiny.

The audit of Balco divestment assumes significance as Chhattisgarh Chief Minister Ajit Jogi along with several opposition leaders, especially from the Congress party have opposed the Balco deal saying that the company, which produces more than 15 per cent of the country's aluminum production was 'under valued'.

The DoD had defended the transaction saying the government had received a much larger amount from Sterlite Industries compared to what the valuation results stipulated using any of the five methods employed.

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