BALCO: The Disinvestment Story|Business Ethics Case Studies
            

BALCO: The Disinvestment Story



Case Details Case Introduction 1 Case Introduction 2 Case Excerpts

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Introduction

In February 2001, the Government of India (GoI) struck its first disinvestment deal in the fiscal 2000-01. It approved the sale of its 51% stake in aluminium major, Bharat Aluminium Co Ltd (Balco) to Sterlite Industries Ltd. (SIL), for Rs. 551.5 crores. Balco was a profit making public sector company under the Ministry of Mines (MoM).

In 2000, it had a turnover of Rs.898 crores and a profit after tax of Rs. 56 crores. Balco had two working units - an integrated Aluminium complex situated at Korba in Chhattisgarh and the second at Bidhanbag in West Bengal equipped to produce only on downstream facilities. Balco had a total workforce of 7,000.......

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The Opposition launched a massive attack accusing the BJP Government of 'selling out' to private interests. Also, the Chattisgarh Chief Minister, Ajit Jogi, (Jogi) alleged a Rs. 100 crore kickback in the sale involving key officials. Jogi also threatened to cancel the bauxite mining and land lease Balco was granted as a Public Sector Unit (PSU) in case the GoI failed to review the proposal.

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