Financial Daily from THE HINDU group of publications
Tuesday, Oct 21, 2003
Financial Daily from THE HINDU group of publications Tuesday, Oct 21, 2003 |
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Shipping Industry & Economy - Disinvestment Deadline for SCI financial bids deferred to Nov Our Bureau
New Delhi , Oct. 20 THE Government has deferred the deadline for the submission of financial bids by the three short-listed bidders for the sale of 51 per cent stake in Shipping Corporation of India (SCI). The bids, which were to be put in by October 20 (Monday), are now likely to be called sometime around end November. The Ministry of Disinvestment through its advisors SBI Caps-Lazard combine has informed Essar Shipping, Sterlite and Videocon that the final date for submitting price bids has now been postponed towards the end of November, Government officials involved in the exercise told Business Line. The deadline for financial bids has been deferred till a clutch of court cases on privatisation brings clarity to the Government's disinvestment programme, he said. On November 10, the Mumbai High Court will take up for hearing a petition filed by the employees of SCI challenging the privatisation of the company on two counts. One, the merger of Moghul Shipping Line and Jayanthi Shipping with SCI was effected through an Act of Parliament. Hence, the employees have contended that the privatisation of SCI would also require prior approval of Parliament as in the case of HPCL and BPCL. The Apex Court had, in September, ruled that the privatisation of HPCL and BPCL would require Parliamentary nod since these two companies were nationalised through Acts of Parliament. The employees have also questioned the Government's rationale in proceeding with the same set of bidders who were left in the fray during the first round of bidding, which had led the Government to halt the process and change the bidding parameters to elicit foreign participation. Despite altering the bidding parameters, foreign participation has remained elusive, the petitioners have contended. The Supreme Court had observed on October 13 during the course of a hearing on Jessop & Co that any PSU drawing funds from the Consolidated Fund of India would be guided by the ruling that prior approval of Parliament was required before privatising such entities even if these companies were not nationalised through an Act of Parliament. This case will come up for hearing in mid-November. The Government is also expected to seek clarification or review of the recent Supreme Court verdict on HPCL and BPCL to remove the uncertainty it has cast on the entire disinvestment programme. The Attorney General, Mr Soli Sorabjee, had told the Supreme Court during the hearing on Jessop case that the ruling on HPCL and BPCL needed "serious reconsideration" as it had the potential to be interpreted in a different way. Essar Shipping, one of the strong contenders among the three bidders for buying SCI, was all set to submit the bids on Monday when it was informed about the change in schedule for financial bids, company sources said.
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