Nalco defends `takeover’ of sick IAPL

Controversy shrouded the take over recently after the state Janata Dal (S) President Ashok Das demanded a CBI probe into the deal alleging that Nalco’s decision to acquire the sick company was taken under pressure from a former Union Minister who had acted at the behest of the BJP-led NDA government at the centre.

When asked as to how Nalco’s equity capital in the IAPL had come down from Rs 118.56 crore to Rs 90 crore, the CMD explained that the earlier equity capital included a 25 per cent contribution through public issues which did not materialise.

Responding to the charge that the deal lacked transparency as Nalco had engaged Mecon, consultants to IAPL as well, to make the techno-economic study of the takeover, he said his company had also entrusted another company, A F Ferguson, to go into the matter. "The decision to go ahead with the acquisition was taken only after the latter’s report was received." Replying to a question on the audit board’s reported comment that Nalco’s claim of its board of directors being competent to take the acquisition decision was untenable, Parvathisem said the company was yet to send its response in that context. Parvathisem also denied that Nalco’s own strip cast unit set up at Angul had become unviable. "This report is incorrect," he said.

Stating that the unit had began trial production, he said that the initial teething problems had been overcome. Questioned about Nalco being involved in an aluminium project in Andhra Pradesh, Parvathisem said the AP government, in its bid to exploit the bauxite deposits in that state, had been considering Nalco as a possible partner.

"But there had been no formal proposal to this effect till now," he said. Asked if there was any possibility of Nalco taking over any other company, the CMD said no such proposal was in the pipeline at the moment. But the situation being dynamic, things could change within the next three-four months, he said.

Nalco has earned a net profit of Rs 512.10 crore during 1999-2000 registering a 106.28 per cent increase over the profit made in the previous year. As per the unaudited results for the 1999-2000 financial year, the profit before tax stood at a record Rs 683.35 crore, he told the company’s annual press conference here today. The company also reported a record sales turnover of Rs 2,142.35 crore which was 42.19 per cent more than the previous year’s figure of Rs 1,506.65 crore.