27 July, 2021

Suspicious Mould On This Bread

A preliminary CAG report finds discrepancies and undervaluation in the sale of Modern Food Industri es to HLL last year

Tribhuvan Tiwari
Suspicious Mould On This Bread
Even as the government holds up Modern Food Industries Limited (mfil) as a model of successful disinvestment, the Comptroller and Auditor General's (cag) office has found several discrepancies in the sale of the firm to Hindustan Lever Ltd (hll) last year. In the main, the audit objection focuses on the undervaluation of the company before it was put up for sale. The cag objections could well lead to a review of the procedure now followed in psu divestment.

The draft or preliminary inspection report (amgII/Review/mfil/2000-01/398) was forwarded by the cag's office to the department of disinvestment on March 2 this year. Further information from the DoD was also sought. The DoD responded (vide letter no. 12/1/2001—DoD) on March 15. But the reply was found "not satisfactory" by cag.

The main audit objections have to do with the undervaluation of mfil, a point that has consistently been raised by the Congress and other parties inside and outside Parliament. Opposition MPs had charged the government with selling the psu for a song. Of late, the government has been trying...

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