TLI Staff
New Delhi: Amid controversies around the little-known bidder for state-run Central Electronics Ltd (CEL), the Department of Investment and Public Asset Management (DIPAM) on Wednesday said that the government has disqualified Nandal Finance and Leasing Pvt Ltd as successful bidder for 100% equity stake in the company.
The transaction relating to strategic sale of CEL has hence been terminated.
“After careful consideration, the Government of India has decided, based on the decisions of the Alternative Mechanism (Empowered Group of Ministers), to (i) disqualify the successful bidder (ii) exclude the successful bid (as approved by the government on 29.11.2021) from any further consideration and (iii) terminate the current transaction,” DIPAM said in a statement today.
A panel of central ministers comprising Transport Minister Nitin Gadkari, Finance Minister Nirmala Sitharaman and Minister of State (Independent charge) for Science and Technology Jitendra Singh had last year approved Rs 210 crore bid of Nandal Finance and Leasing Pvt Ltd for sale of 100% equity stake in CEL.
The decision was, however, soon put on hold as controversies erupted around qualification and credential of the highest bidder. Valuation of CEL was also questioned.
“While keeping the Letter of Intent (LoI) on hold, Government examined these allegations and found merit only in one allegation regarding pendency of a proceeding in National Company Law Appellate Tribunal (NCLAT) against the successful bidder that may result in disqualification of the bid under applicable provisions of Preliminary Information Memorandum (PIM) and Request for Proposal (RFP),” said DIPAM on Wednesday in a statement.
The process for disinvestment of CEL first began in October 2016 with the ‘in-principle’ approval of the Cabinet Committee on Economic Affairs (CCEA). No financial bids were received in the first attempt to sell the PSU.
The process was re-launched in February 2020 with the issue of Preliminary Information Memorandum (PIM) and request for Expressions of Interest (EOI).
After receipt of sealed financial bids and in line with the approved procedure for strategic disinvestment, a reserve price of Rs 194 crore was fixed based on valuations by the Transaction Adviser (TA) and the Asset Valuer (AV).
The two qualified bidders — Nandal Finance and Leasing Pvt Ltd and JPM Industries Ltd submitted financial bids of Rs 210 crore and Rs 190 crore respectively. The Ministerial panel cleared the winning bid of Nandal Finance and Leasing Pvt Ltd.