Comments
Learning from past two incidences, the government has now asked bidder to declare an incidence, which could disqualify them from strategic disinvestment of a Central Public Sector Enterprises (CPSE), within seven days of happening. Details about ultimate beneficial owner and corporate restructuring of bidder are also to be intimated.
In response to queries raised by interested bidders (IB) for strategic disinvestment of NMDC Steel Limited, the Department of Investment and Public Asset Management (DIPAM) said that interested bidder would have to declare “I state that, in the event [insert name of the IB/ Consortium Member] is attracted by any of the disqualifications or any other factor which makes us ineligible in terms of the PIM (Information Memorandum) during the pendency of the process of strategic disinvestment the same would be communicated to the transaction advisor within 7 business days of such disqualification/ineligibility.”
In the original PIM, there was no timeline, but just a discloser only. Bidder said even that clause was not very clear.
These responses are critical as last year strategic disinvestment of helicopter service provider Pawan Hans was put on hold as the government wants to legally examine an order against key consortium member of successful bidder.
Also read
Prior to that, transaction for Central Electronics Limited (CE) was terminated after successful bidder was disqualified. In this matter, the government found merit in one allegation regarding pendency of a proceeding in National Company Law Appellate Tribunal against the successful bidder that may result in disqualification of the bid under applicable provisions of PIM and Request for Proposal (RFP).
In another query, bidder wanted to confirm that an ongoing merger involving the IB its group companies, pursuant to which its parent will be amalgamated into the IB will not result in any disqualification. DIPAM responded by saying that IB to provide information regarding the ongoing intra-group corporate restructuring or reorganisation (including by way of merger, amalgamation etc.) involving the IB or the Parent and the associated entities at time of EOI submission. “Government may take decision thereafter,” it said.
Details of promoters
In the original PIM, one clause is related with providing identity of the natural persons who are the ‘Ultimate Beneficial Owners’. Bidders said there are large number of shareholders in a listed company, so will providing details of ‘Ultimate Beneficial Owners’ with respect to its ‘Promoters’ be sufficient. DIPAM replied that IB is required to provide the details of promoters and UBO details for shareholders holding more than 10 per cent of the equity share capital of IB.
The government is yet to complete any strategic disinvestment process during the current fiscal year or FY23. Even much-awaited BPCL sell-off (excluding Numaligarh Refinery) had to call off due to insufficient number of bidders. Now, as it has to implement new PSE policy where more and more CPSEs are the privatised, clearer terms will be helpful.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.