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NALCO’s export deal with dubious companies raises eyebrows

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OST Business Bureau

NEW DELHI / BHUBANESWAR, Sept 25

Navaratna company Nalco’s multi-billion alumina export deal with two companies from Iran and Dubai, which are under the scanner of the US and the European Union for their dubious dealings has raised eyebrows.

The deals with the two companies were struck without checking their credentials and the decision to allow them to bid directly was in violation of transparency norms, reliable sources told OST.

nalco

Since the present NALCO chairman cum managing director (CMD) continues to hold the post of the company’s finance and commercial director, he is both the proposer and the approver of the deal, a source familiar with the deal said.

The European Union had imposed sanctions on the Iranian company in December 2012 for supplying aluminium to The Iran Centrifuge Technology Co (TESA), which is a subsidiary of the Atomic Energy Organization of Iran (AEOI), international news agency Reuters reported.

Swiss trading giants Trafigura and Glencore Xstrata have both supplied alumina to this company in the past as part of their barter deals in exchange for aluminium. But both of them halted supplies over new EU sanctions, the report said.Iran has been facing trouble in getting alumina after the EU sanction, it added.

Nalco’s decision to allow this company to bid recently and finalize a tender in its favour immediately thereafter surprised industry watchers. What raises suspicion of foul play, sources said, was the hush-hush manner in which the deal was rushed through. The Bhubaneswar-headquartered company neither posted the details of the deal on its websites not did it share the information with any media, a practice it used to adopt earlier, sources said.

The chairman himself reportedly threatened his officials of dire consequences if they provide any information on the dubious deal to the media. He allegedly issued a memo to a company director for giving an interview to an international news agency, sources said.

Nalco is a highly profit making public sector undertaking and the people of Odisha have an emotional attachment with this company. But over the past years, there have been allegations that a powerful lobby is working overtime to make it sick so as to pave way for its full scale privatization.

While the company has failed to earn the desired profit in the recent past due to inefficient administration, questions have been raised over the role played by the Union Ministry of Mines under which Nalco operates.

It is worth mentioning here that many of the persons who have held the coveted post of Nalco CMD in the past have faced serious corruption charges.

It is a matter of surprise that the government not only appointed its chairman-in-charge as full time chairman cum managing director, it also allowed him to function as director of finance and commercial simultaneously, thereby creating scope for whimsical decisions and even corruption.

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