Central public sector undertakings (CPSUs) have taken a tough stand on the Comptroller & Auditor General of India?s (CAG) recent reports revealing financial irregularities worth more than Rs 8,000 crore in their operations. Putting across the views of the enterprises, Standing Conference of Public Enterprises? (SCOPE) chairman Arup Roy Choudhury has told CAG Vinod Rai that such revelation may affect the credibility of the public enterprises and reduce the proceeds that the government wants to raise through disinvestment.
?Specially at the time when the government is considering divesting shares of CPSUs in the market, such kind of statement shall undermine the share prices of public sector companies in the market, will only affect the quantum of realisables and go against the spirit and interest of the government,? Choudhury said in a letter addressed to Rai.
The SCOPE chairman said the CPSUs were ?highly pained and concerned? on the CAG?s observations that were ?very unjust?. However, he did not deny the possibility that instances of financial and managerial inconsistencies may be there in CPSUs. ?While we agree that there might be certain pitfalls which crop up during CAG audit, these are periodically clarified from time to time,? Choudhury said, adding that private companies ?have much larger negativities in their accounting statements?.
SCOPE urged the CAG to also highlight the strengths in the financial results of CPSUs while releasing its reports. ?With such positivities, the stakeholders will be able to make a more balanced appreciation of the functioning of PSEs. With such positive highlights, the shortcomings observed in the course of CAG audit will not be damaging to the public image and competitive positioning of the PSEs,? Choudhury said in the letter dated July 11.
The UPA government is in the process of framing a new disinvestment policy for its new Left-free innings. In a series of audit reports on CPSUs last month, the CAG observed either under-statement or over-statement of books of accounts and non-implementation of corporate governance norms by selected listed firms like NTPC, Bharat Heavy Electricals Ltd, Power Finance Corporation, etc.
Following the revelation, the government also issued a directive warning of a cut in budgetary allocation and downgrade in the status of navratna and mini-ratna firms if the CPSUs don?t strictly adhere to the corporate governance rules.