Valuation of KRIBHCO fertiliser plant under fire
A co-operative society under the administrative control of the Union Ministry of Chemical and Fertilisers, KRIBHCO, is operating in many states. In 2005, it purchased the Oswal Chemicals and Fertilizers Limited (OCFL), an ailing plant at Shahjanpur in Uttar Pradesh in a joint venture with Shyam Basic Infrastructure Project at a cost of Rs 1,900 crore, wherein KRIBHCO currently has 85 per cent stake.
Information obtained through application filed under the RTI Act has revealed that the valuation of assets of Oswal Fertiliser Plant was conducted by Edelweiss Capital Limited. It was engaged by Shyam Group of companies on 3rd November, 2005 and on 5th November, 2011, the valuation was completed and the deal was sealed.
The RTI reply from also reveals that KRIBHCO Edelweiss Capital had no previous experience of valuing a fertiliser plant and had relied on the information provided to them by OCFL for its report. As the Shyam Group too had no experience in fertiliser industry, the hasty valuation of the OCFL where the consultant which did valuation did not have experience in valuing the fertiliser companies has raised doubts about the genuineness of the process.