People's Democracy

‘Probe Disinvestment Of All 8 PSUs’ 

CPI(M) Polit Bureau member and MP, Chittabrata Majumdar, sent the following letter to the prime minister Dr Manmohan Singh on September 2, 2006 regarding the CAG report on disinvestments.

THIS has reference to the reported cabinet decision on August 30, 2006 to take cognisance of the recent CAG report on strategic sale of BALCO in 2001. As you are kindly aware CAG, in its report tabled on 25.08.2006 in parliament, has concluded after examining the government records of 9 PSUs sold during 1999-2003, that the assets were undervalued, valuation was done in extreme hurry and goal posts were changed during the transaction process to suit some bidders. Moreover, the clauses of call option and post-disinvestment claims in Share Holders and Share Purchase Agreements, would lead to a further loss to government exchequer.

I, therefore, urge upon you to take cognisance of the CAG report not only on BALCO but also of seven other PSUs (excluding IBP which was sold to another PSU) covered in the report. The CAG’s mandate, you will agree, is to audit records of transactions and not to investigate corruption. CAG can only point out procedural lapses that have occurred during the sale of 8 PSUs (including BALCO and excluding IBP), leading to loss of hundreds of crores of rupees. In this connection you may kindly refer to the CAG Report No 2 of 2005 in parliament last year, on the sale of Hotel Juhu Centaur and Hotel Airport Centaur, Mumbai. There were similar findings in this report also regarding undervaluation and lack of competitive bidding. The government had ordered CBI probe in July 2005 based on these findings.

There is no reason why on the same ground CBI probe should not be extended to the sale of above 8 PSUs based on the latest CAG report, as the indictment in this report is more severe involving much bigger loss to the exchequer. 

I request you to order such a probe immediately. (INN)