Name of Mafco bidder still under wraps

The name of the successful bidder for the state government's 100 per cent equity stake in Mafco is yet to be disclosed even four months after the Maharashtra Board for Restructuring State Enterprises (MBRSE) finalised the bid.

According to observers, the state government is apparently disinclined to go along with the MBRSE order, although under law the board's recommendations are binding upon it.

The option, therefore open to the state, if it does not want to comply with the MBRSE order, is to challenge it in the form of a writ petition before the Mumbai High Court.

An official of the Icra Advisory Services, the principal secretary (dairy development) J P Dange and a senior finance department official confirmed that the bidding process has been completed. However, they declined to divulge the name of the bidder.

For the last four months, the Mafco file is lying with the state finance department, pending government consideration.

The bidding process for disinvesting the state government's stake in Mafco was initiated in December 2002. Five bidders "" Al Kabeer Exports, Frigerio Conserva Allana, ITC, a consortium led by Blowplast Industries and another led by Deepak Fertilizers & Petrochemicals Corporations "" had been shortlisted.

Dange, while confirming that the finalised proposal was pending, said, "The MBRSE is afterall, a baby of the Act legislated by the state government. The government, if it disagrees with the MBRSE recommendation, may enact another law to rescind the MBRSE order."

However, the disinvestment of Mafco, as effectively completed by MBRSE, has to be followed, a senior state government official said.

The order can only be questioned in the form of a writ petition before the Mumbai High Court.

"This is because, as per the Act under which MBRSE was set up, the board has been conferred the powers equal to those of a civil court under the Code of Civil Procedure, 1908. The proceedings before the MBRSE are judicial proceedings," the official said.

Mafco, established in 1970, is primarily engaged in processing and marketing of frozen vegetables and fruits. As on March 31, 2002, the paid-up share capital of Mafco was Rs 50.36 million, consisting of 5,03,573 shares of Rs 100 each, and its networth was Rs 51.49 million.

Mafco reported a turnover of Rs 242.51 million and a net loss of Rs 26.08 million during the year ended March 31, 2002. Mafco's shares are not listed on any stock exchange.

Another official said, "It is true that the orders of the MBRSE are binding upon the state public sector undertakings (PSUs). The state government is reluctant to agree with the orders."

Even as the state government ponders whether to go ahead with the disinvestment of Mafco, the successful bidder is sure to consider legal options.