The government has put disinvestment of Central Electronics Limited on hold pending examination of allegations made by the public sector enterprises’ employees association, a top official told Mint.
The letter of intent to the winning bidder Nandal Finance and Leasing Ltd has been put on hold, even as the strategic disinvestment under the Department of Scientific and Industrial Research (DSIR), was approved for Rs 260 crore in November 2021.
“LoI is on hold pending examination of allegations made by CEL employees’ association,” Tuhin Kanta Pandey, secretary of the department of investment and public asset management (DIPAM) told Mint. The department is the nodal body undertaking the divestment process.
Key among the allegations made by the employees’ association are that the bidders were inter-related by virtue of one common director in the group companies, and that there is a case pending against the successful bidder in the National Law Company Appellate Tribunal.
While the government is of the view that these were serious allegations and is conducting a legal examination, it isn’t looking into other allegations made by the association.
The association has said that the company should not be disinvested as they are a very important company and should remain in public sector, and that successful bidder was a financial company which does not have experience.
The process for disinvestment of CEL commenced in October 2016, but after one failed attempt the government took another shot at the strategic sale in February 2021.
The government received financial bids and kept the reserve price of ₹194 crore in line with the approved procedure for strategic disinvestment, based on valuations by the transaction adviser and the asset valuer. The winning bid was by Nandal Finance and Leasing Ltd for ₹260 crore, the government had said in November, adding that the process would be completed by March 2022.
Source: Mint