Balco - The Disinvestment Story
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Details
Themes: Corporate Restructuring
Period : 2001
Organization : BALCO
Pub Date : 2002
Countries : India
Industry : Metals & Mining
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Case Code : BECG004
Case Length : 10 Pages
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Stage IV: Post Sell Out Drama
After the sell out of Balco, Jogi continued to fire his salvo and demanded a parliamentary probe into the deal. Jogi alleged that the company was sold at a tenth of its actual value. He said, "In a deal in which property worth Rs.5,000 crore to Rs.6,000 crore (Rs.50 to 60 billion) is being sold for just Rs.551 crore (Rs.5.51 billion), the circumstances speak for themselves." In an interview published in a national daily, The Indian Express, Jogi alleged, "You are talking of transparency. But your transparency is such that even the chief minister of the state did not know that this company is being sold.
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They did not take anyone into confidence. The entire deal was struck surreptitiously." "Arun Shourie is telling lies. He is a liar. Let him give even a single example when he consulted me, when he contacted me on Balco," Jogi charged in the interview. Demanding a probe by a joint parliamentary committee (JPC), Jogi said, "Whenever such kinds of scams take place, it is not done in the presence of witnesses. Since big money and big people are involved, it should be probed." Contending that the deal took place 'without taking the people into confidence,' Jogi said his government was ready to purchase the company for the same amount that had been paid by SIL. "It is a question of fighting for the people's right, especially for the tribals of Chhatisgarh," he asserted. |
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The GoI moved the Supreme Court to prevent the state government from disrupting the work at the Balco (Korba) plant. The Supreme Court restrained the Chattisgarh government from disrupting supply of water, electricity and food to the Balco plant or township at Korba. In its order, the division bench of the apex court said, "The state of Chattisgarh, and chief secretary and the director general of police in particular, are directed to afford full protection to the workers, their families and management inside and outside the Balco plant at Korba, so that they do not suffer physical harm of any kind."
The Parliament witnessed heated exchanges between Opposition and ruling party with the Opposition questioning the GoI's propriety in moving the Supreme Court without taking the Chattisgarh State into confidence. Countering the Opposition charges, Shourie said the Centre had received 'alarming reports' that water and electricity to the Balco plant would be cut and the managerial staff would not be allowed to enter the state. He added that the issue had turned into a law and order problem after an ambulance was burnt and a CISF van damaged by activists.
Dismissing the Opposition's charge of not consulting the State Government, Shourie said the Disinvestment Secretary had written to the Chattisgarh Chief Secretary about the disturbing reports and the possibility of damage to the plant, but there had been no response. Meanwhile, the controversy surrounding the sale of Balco continued unabated, even as Shourie requested the Comptroller & Auditor General, VK Shunglu to assign officials to scrutinize all documents pertaining to the privatization of Balco. Major trade unions refused to relent and called for a country-wide protest on March 20, against Balco divestment. The trade unions also planned a country-wide strike and hartal.
The GoI warned the state government in Chattisgarh that the Centre could recover the losses suffered by Balco from the state grants, if it continued its belligerent attitude on the ongoing strike. The statement said, "The Centre holds 49 per cent share in Balco and if the Congress government led by Ajit Jogi does not allow resumption of working of the company, the Centre could recover the money from the assistance given to the state." Meanwhile, the indefinite strike by Balco workers at Korba, continued for the fifth day.