New Delhi, Sep 28 (FN Agency) The Department of Investment and Public Asset Management (DIPAM) on Wednesday said that the government has disqualified Nandal Finance and Leasing Pvt Ltd as successful bidder for 100% equity stake in Central Electronics Ltd (CEL) amid certain allegations regarding its eligibility. The transaction relating to strategic sale of the state-run company has hence been cancelled.” After careful consideration, 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 29.11.2021) from any further consideration and (iii) terminate the current transaction,” DIPAM said in a statement. The Cabinet Committee on Economic Affairs (CCEA) empowered Alternative Mechanism (AM) comprising Transport Minister Nitin Gadkari, Finance Minister Nirmala Sitharaman and Minister of State (Independent charge) for Science and Technology Jitendra Singh had last year approved Rs 210 crore bid of Nandal Finance and Leasing Pvt Ltd for sale of 100% equity stake in CEL. The decision was, however, soon put on hold as a section of company employees raised questions over its valuation and credentials of the bidder.
The Congress party also challenged the decision and wanted to know as to how a little-known firm qualified for the deal. “While keeping the Letter of Intent (LoI) on hold, Government examined these allegations and found merit only in one allegation regarding pendency of a proceeding in National Company Law Appellate Tribunal (NCLAT) against the successful bidder that may result in disqualification of the bid under applicable provisions of Preliminary Information Memorandum (PIM) and Request for Proposal (RFP),” said DIPAM on Wednesday in a statement. The process for disinvestment of CEL commenced in October 2016 with the ‘in-principle’ approval of the CCEA. In the first attempt, no financial bids were received. The process was re-launched in February 2020 with issue of Preliminary Information Memorandum (PIM) and request for Expressions of Interest (EOI). After receipt of sealed financial bids and in line with the approved procedure for strategic disinvestment, a reserve price of Rs 194 crore was fixed based on valuations by the Transaction Adviser (TA) and the Asset Valuer (AV) using respective methodologies. The two qualified bidders — Nandal Finance and Leasing Pvt Ltd and JPM Industries Ltd submitted bids of Rs 210 crore and Rs 190 crore respectively. The Ministerial panel last November cleared the winning bid of Nandal Finance and Leasing Pvt Ltd.