Final hearing for disinvestment bidders, says Shourie

By Sushma Ramachandran

NEW DELHI, JULY 7. The bidders for disinvestment of various public sector companies, who have prima facie been disqualified, will be given a final hearing before orders are passed, according to the Disinvestment Minister, Mr. Arun Shourie.

He told The Hindu that though the disqualification of bids by Hindujas, Videocon and Sterlite Industries was announced on Friday, there was a formal procedure to be followed before the bids were actually rejected. This would mean giving a chance to the bidders to present their point of view.

Asked whether the hearing would be done by the Disinvestment Ministry, Mr. Shourie said it would be carried out in accordance with procedures, presumably by the Ministry. The orders would be passed if the bidders' viewpoint was found unacceptable.

It seems clear that the three corporate entities have been seen to violate the new guidelines. The decision to disqualify the Hindujas was taken by the Cabinet Committee on Security (CCS) based on the norms laid down in an earlier meeting on Friday by the Cabinet Committee on Disinvestment (CCD).

The guidelines stipulate that in matters regarding the country's security, the bidder and its sister concerns could be disqualified if they had been chargesheeted by any regulatory agency or convicted by a court.

The CCS had rejected the bid of the Hindujas for both Air India and Indian Airlines disinvestment since the brothers have been charge-sheeted by the CBI.

As for Videocon and Sterlite Industries, the companies had been indicted by the Securities and Exchange Board of India (SEBI) and will not be allowed to access the capital markets.

Mr. Shourie said the guidelines stipulated that in cases other than the country's security, the bidder will be disqualified if indicted by a regulatory authority for a ``grave offence'' or if the ability of the bidder to manage the public enterprise after it's disinvestment was in doubt.

On the basis of these guidelines, the CCD had decided to disqualify Sterlite Industries and Videocon. Videocon had bid for Indian Airlines and Sterlite Industries is in the fray for Hindustan Zinc Limited (HZL) and Hindustan Copper Limited (HCL).

Mr. Shourie clarified that the guidelines did not affect the purchase of Bharat Aluminium Corporation Limited (BALCO) by Sterlite Industries as they will become effective prospectively than retrospectively. The advice of the Law Ministry had been sought before taking a view on this issue, he said.

Arbitrary, say Hindujas

PTI reports from London:

The Hindujas today termed ``unfortunate and arbitrary'' the Centre's decision to ban them from bidding for a stake in Air India and Indian Airlines and said it would decide its next step after seeking legal advice.

``While the guidelines of disqualification finalised by the Department of Disinvestment are yet awaited, and would be studied in detail, the initial response from the legal advisers is that the bonafides of the DoD's action is questionable, as the issue has been raised months after the process started.

``In fact, the Bofors chargesheet had been filed in October 2000, before the Air India disinvestment process had even started, with the Government having full knowledge in this regard'', he said.

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