The government has put on hold the privatisation of Central Electronics Ltd confirmed the Department of Investment and Public Asset Management on Thursday.
This move comes at a time when the employees union has approached the court against the sell off. On Wednesday, BusinessLine had reported that the sale of the public sector CEL to Nandal Finance and Leasing Pvt Ltd is under the radar of the Comptroller and Auditor General after the joint platform of trade unions, including the BMS, complained of bid rigging.
DIPAM Secretary Tuhin Kanta Pandey said that allegations of under-valuation in the ₹210 crore highest bid made by city-based Nandal Finance & Leasing are being examined. “Letter of Intent (LoI) is on hold pending examination of allegations made by CEL employees Association,” he told BusinessLIne .
The government had in November approved the sale of CEL, under the Department of Scientific and Industrial Research (DSIR), to Nandal Finance for ₹210 crore. The transaction was scheduled to be completed by March 2022. Following this the CEL, employee association approached the Delhi High Court against the privatisation, and the opposition Congress too alleged that the company is being undervalued.
Pandey said that the inter-ministerial group on disinvestment is examining the allegations.
‘Looking into allegations’
“We have kept the LoI on hold since it is sub judice and allegations of employees association are under examination,” he said. Further he mentioned that the book value of CEL is ₹108 crore and turnover is around ₹200 crore.
He said the CEL’s valuation has been done by transaction advisor and asset valuer following which the Government arrived at the reserve price of ₹194 crore. “The net asset value of the company is actually less than ₹194 crore if we take the liabilities into account. The land lease is for 90 years out of which 46 years is already gone,” he said.
The Congress has claimed that the valuation of the CEL using different methods was between ₹957 crore and ₹1,600 crore.
Incorporated in 1974, CEL, under the Ministry of Science and Technology, is a pioneer in the field of Solar Photovoltaic (SPV) and it has developed the technology with its own R&D efforts. It has also developed axle counter systems that are being used in Railway signalling systems for the safe running of trains.
Meanwhille, trade unions are not content with latest move. “The Centre should revoke the decision to privatise the CEL. It is a strategically important CPSE that has contributed to the growth of the country. It should not be sold off like this. A primary glance at the balance sheet of CEL would tell anyone that it is a profit making company which has a lot of potential. It was sold to an unknown company for throwaway price. The entire decision of the CCEA must be revoked,” said TK Thomas, leader of Samyukt Karmchari Sanghatan, a joint platform of various trade unions in the CEL.
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