The Hindu Business Line : Chidambaram backs IFCI’s rejection of conditional bid

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Chidambaram backs IFCI’s rejection of conditional bid

Urges banks to see the merits of consolidation

New milestone: The Union Finance Minister, Mr P. Chidambaram, and the Vijaya Bank Chairman & MD, Mr Prakash P. Mallya, at the opening of 1000th branch of the bank in Bangalore on Saturday. - K. Gopinathan

Our Bureau

Bangalore, Dec. 29 The Union Finance Minister, Mr P. Chidambaram, on Saturday endorsed IFCI Ltd’s decision to refuse the sale of its 26 per cent stake to strategic investors.

“We got a conditional bid (from Sterlite-Morgan) and therefore IFCI rejected the single, conditional bid. In my view, that is the correct decision,” Mr Chidambaram told newspersons on the sidelines of a function to inaugurate Vijaya Bank’s 1,000th branch.

Three consortia of Sterlite-Morgan, Shinsei Bank-J.C. Flowers-Punjab National Bank and Cargill Financial Services Corp-Texas Pacific Group had put financial bids for a 26 per cent stake in IFCI. Sterlite-Morgan had emerged as the highest bidder at of Rs 110 per share.

Earlier, Mr Chidambaram reiterated the benefits of consolidation for efficient and profitable running of businesses and said it had become inevitable to keep pace with the rapid growth of the economy.

Change mindset

He stressed the need for a change of mindset among bankers on the issue of consolidation and said, “I know there has been opposition to this. I urge the staff and unions not to resist something which is inevitable. Two decades ago there was stiff resistance to computerisation in the banking industry but computerisation is an accepted fact,” he added.

Mr Chidambaram also launched V-GenUth, a savings bank account designed by Vijaya Bank for children.

Related Stories:
IFCI fiasco
IFCI board calls off 26% stake sale process
IFCI plummets 23% as deal falls through
3 in fray for IFCI stake

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Chidambaram backs IFCI’s rejection of conditional bid