The government has terminated the privatisation of Central Electronics Limited (CEL) due to non-disclosure of litigation by the successful bidder. This is the second instance of privatisation being called off, after BPCL.
On November 29, 2021, the government approved the sale of CEL to Nandal Finance and Leasing Pvt Ltd. Incorporated in 1974, CEL, under the Ministry of Science and Technology, is a pioneer in the solar photovoltaic field and has developed the technology with its own R&D. It has also developed axle counter systems that are used in railway signalling systems.
“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 November 21, 2021) from any further consideration and (iii) terminate the current transaction,” Department of Investment and Pubic Asset Management (DIPAM) said in a note.
Further, it has been said that certain allegations were received against the bidder and the bidding process. While keeping the Letter of Intent (LoI) on hold, the government examined the allegations and found merit in one allegation regarding pendency of a proceeding in National Company Law Appellate Tribunal (NCLAT) against the successful bidder, which may result in disqualification of the bid under the provisions of the Preliminary Information Memorandum (PIM) and Request for Proposal (RFP). The successful bidder was given due opportunity to show cause on the points of disqualification. Based on that, the bid was terminated.
Earlier in January, the government put on hold the privatisation of CEL after the employees union approached the court against the selloff. At that time, BusinessLine had reported that the sale of CEL to Nandal Finance and Leasing Pvt Ltd was under the radar of the Comptroller and Auditor General after the joint platform of trade unions, including the BMS, complained of bid rigging. After allegation of under-valuation in the ₹210-crore highest bid, the LoI was on hold.