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Modern Foods undervalued, says CAG

Comptroller and Auditor General has said that Modern Food Industries real worth was undervalued during its sale to the Hindustan Lever.

Disclosing this in Rajya Sabha on Monday, Divestment Minister Arun Shourie said CAG in its preliminary report said that ANZ Grindlays, which was appointed global advisor by the government, had undervalued the plant and machinery leading to lower valuation.

Shourie told the House in reply to a written question that the plant and machinery being used by Modern Food Industries was of 1960 and 70's vintage and was obsolete and therefore the only option was to consider their book value at Rs 86.4 million.

Shourie in reply to another question ruled out that the government was going for re-bidding in the Air India divestment. He asserted that there had been no delay in the divestment process in the country's international flag carrier and that some bidders had withdrawn for internal reasons.

Regarding divestment in ITDC hotels, the minister said that expressions of interest in respect of 17 out of the total of 26 ITDC hotels had been received.

Shourie said the current year target for divestment stood at Rs 100 billion and for the past seven months the receipts had hardly been Rs 18.69 billion.

On the steel sector, he said the government was going ahead with divestment in Kudremukh Iron Ore Ltd, MSTC and Sponge Iron Ltd.

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