Govt sets up panel for BALCO sale to Sterlite

Govt sets up panel for BALCO sale to Sterlite

Mumbai Oct 25, 2007 14:26
Sterlite currently owns 68% in BALCO through its holding company Vedanta Resources. It had bought 51% in the PSU aluminum producer from the Govt in 2001
The Government on Thursday set up a committee to examine the proposal by Sterlite Industries Ltd. to acquire the balance 49% stake in Bharat Aluminium Company Ltd. (BALCO).

A Committee of Secretaries would study the legal aspects, Parliamentary Affairs Minister Priya Ranjan Dasmunsi said after a Cabinet meeting in New Delhi today. The panel will comprise top bureaucrats from legal, mining and disinvestment departments.

Sterlite currently owns 68% in BALCO through its UK-based holding company Vedanta Resources Plc. It had bought 51% of the public-sector aluminum producer from the Government in 2001.

In March 2004, Sterlite sent a call notice to the Government along with a cheque of Rs10.98bn for acquiring the remaining 49% stake in BALCO. But, the UPA Government rejected Sterlite's cheque, citing the CAG's criticised price and valuation of the disinvestment in 2001.

The matter was referred to the Attorney General in 2006 after a dispute over pricing and valuation. The AG declared the call option as 'ultra-vires' of the Companies Act, 1956. Sterlite has challenged the decision in the Delhi High Court.