UPA to cancel further Balco stake sale, to return Rs 1,098 crore to Sterlite

Mumbai: The ruling United Progressive Alliance government has cancelled further divestment of the Centre's stake in the public sector Bharat Aluminium Company (BALCO), reversing a decision by the previous National Democratic Alliance government.

The government has decided to return the cheque of Rs 1,098 crore sent by Anil Aggarwal-controlled Sterlite Industries for acquiring the remaining 49 per cent government stake in BALCO.

"A committee of secretaries (CoS) under the law secretary, comprising the disinvestment and mines secretaries and supervised by the cabinet secretary will go into the issue," information and broadcasting minister Priya Ranjhan Dasmunshi, said.

The government had in February 2001 divested 51 per cent stake in BALCO to Sterlite Industries for Rs 800 crore even as it retained 49 per cent in the company.

BALCO employees have gone to the Delhi high court challenging the government's decision to reduce its holding. However, the court dismissed the employees' petition and allowed the government to offload its stake.

The decision to refund Rs 1,098 crore to Sterlite will lead to a legal wrangle between the government and Sterlite. According to the transfer deal signed with the government, Sterlite can buy the remaining 49 per cent stake at a price to be decided on the basis of BALCO share price.