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The Planning Commission has directed the ministry of mines to seek the Cabinet's approval on the decision to halt work on the divestment of National Aluminum Company.
The Divestment Development: Complete Coverage
At the recent quarterly performance review, it was pointed out that the divestment ministry could not stop the selloff process in the public sector mining company on the basis of a public announcement made by the Prime Minister.
"Since the decision to divest the company was taken by the Cabinet Committee on Divestment, the decision to halt the process has to be cleared by the same committee," government officials told Business Standard.
They pointed out that the divestment ministry could not drop or delay the sale option -- strategic or through market offering -- without the Cabinet's approval.
| Divestment process |
| The Planning Commission said the disinvestment ministry could not stop the selloff process in Nalco on the basis of a public announcement made by the Prime Minister
The process was put on hold after an announcement by Prime Minister AB Vajpayee on July 15 this year The government intended to offload 10% of its holding in the company through a domestic issue and 20% through an ADR issue |
The Nalco selloff process was put on hold after Prime Minister Atal Bihari Vajpayee ruled out, for the time being, divestment in the public sector mining major at a public meeting near Bhubaneshwar on July 15 this year.
The government intended to offload 10 per cent of its holding in the company through a domestic issue and 20 per cent through an American depository receipts issue towards the end of this calendar year.
PricewaterhouseCoopers, the auditor for the sale, was planning a visit to the company around the time that the divestment ministry stopped all work on its sale, following Vajpayee's announcement.
PwC wanted the government to provide security to its staff for on-site scrutiny of accounts. PwC's request was prompted by the manhandling of a team from Hindalco, a part of the Aditya Birla group, last October. The team had gone for due diligence of the plant, as the government had initially planned a strategic sale of 29.15 per cent in addition to the market float.