Of the 281 government companies audited by Comptroller and Auditor General of India (CAG), equity capital of 72 government companies has been completely eroded and their net worth has moved into negative territory.
According to CAG report, the accumulated losses in these 72 companies were Rs 94,428 crore against equity investment of Rs 15,762 crore as on March 31, 2008, making their combined net worth negative at Rs 78,665 crore.
This included six listed companies whose accumulated loses were Rs 11,349 crore against equity investment of Rs 1,451, crore making their combined net worth negative at Rs 9,898 crore. The total government loans outstanding against 46 companies (out of 72 companies whose capital was fully eroded) on March 31, 2008 stood at Rs 49,926 crore.
The amount of government loans remaining unpaid stood at Rs 11,973 crore, according to report. Also, recovery of loans of Rs 2,755 crore given by government companies to their 14 subsidiaries (included in the 72 companies the equity capital of which had fully eroded) has become doubtful.
Of these 72 companies, 33 companies had been referred to the Board for Industrial and Financial Reconstruction (BIFR).
CAG report also said that four companies overstated their assets by Rs 411 crore while 11 companies overstated profits by 1,129 crore.
Power generator NTPC topped in overstating profits at by Rs 938 crore, followed by Engineering projects India Limited (EPIL), Bharat Electronics and BEML overstated their profits. Likewise, there were under statement of assets by Rs 30 crore in three companies and loss by Rs 238 crore in five companies.
