BPCL stares at director-level vacuum on shaky privatisation process

P Manoj Mumbai | Updated on April 26, 2021

Director Finance and Human Resources Director are set to retire soon

State-run oil refining and marketing firm Bharat Petroleum Corporation Ltd (BPCL) is staring at a director-level vacuum as two more key officials superannuate in the next couple of months even as the on-going privatisation exercise of the ‘Maharatna’ PSU is bogged down by the second wave of coronavirus.

The company’s finance director N Vijayagopal will step down on July 31 upon superannuation while human resources director K Padmakar will leave the company on December 31. Padmakar is also holding additional charge of Chairman and Managing Director. The Public Enterprises Selection Board (PESB), the government’s head-hunter, has advertised for the post of human resources director on April 6. It had placed a similar advertisement in October last year to fill the post of finance director.

Sceptical move

But, industry sources are sceptical about the PESB’s move to go through with the selection process in view of the planned privatisation of the company. This was the reason why the PESB, at the behest of the government, called off interviews of shortlisted candidates for the post of CMD and director (refineries) scheduled in March/April last year.

The government then entrusted human resources director Padmakar with the additional charge of CMD and asked director (marketing) Arun Kumar Singh to assume additional responsibility of director (refineries) from September 1, when the previous incumbents left the company. If no replacements are finalised by July 31 for the post of finance director and by December 31 for the role of human resources director (with additional charge of CMD), and if the privatisation process drags, BPCL would be left with only one functional director from January 1.

Typically, PESB starts the selection process for new CMDs and directors at least one year before the incumbents demits office on retirement. Even after the PESB makes its pick, the candidate has to go through multiple layers of vetting with final sign off by the Appointments Committee of the Cabinet (ACC) led by the Prime Minister.

Green signal

Meanwhile, government sources said that BPCL has readied the ‘virtual data room’ and given the green signal to Deloitte Touche Tohmatsu India LLP, the transaction advisor hired by the Department of Investment and Public Asset Management (DIPAM), to advise and manage the strategic disinvestment process.

“It is the transaction advisor who will have to give access to the virtual data room to the shortlisted bidders to start the due diligence process,” a government official said, adding that neither the company nor the government knows who these bidders are.

The government has decided to privatise BPCL by selling its 52.98 per cent stake to a strategic buyer.

The Vedanta Group has confirmed submitting an expression of interest to acquire BPCL.

Private equity firms Apollo Global Management and Think Gas (promoted by I Squared Capital) are also reported to have filed their expression of interest for India’s second biggest oil marketing company and third largest by refining capacity.

Published on April 26, 2021

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