New Delhi: The government has disqualified the successful bidder chosen for the strategic disinvestment of Central Electronics Limited and has terminated the CEL privatisation process officially. "After careful consideration, the Government of India has decided, based on the decisions of the Alternative Mechanism (Empowered Group of Ministers), to disqualify the successful bidder, exclude the successful bid (as approved by the government on 29.11.2021) from any further consideration and terminate the current transaction," said an official order dated September 28 released by the Department of Investment and Public Asset Management (DIPAM).
On November 29, 2021, the government had selected the strategic buyer for the sale of 100 percent equity shareholding of the government in CEL when it approved the highest price bid of M/s Nandal Finance and Leasing Pvt Ltd (successful bidder) after a transparent, open and competitive bidding process, and following laid down procedure of strategic investment, said DIPAM.
Explaining why the government decided to scrap the CEL privatisation process, DIPAM said, "Subsequently, certain allegations were received against the bidder and the bidding process. 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). The successful bidder was given a due opportunity to show cause on points of disqualification."
The government had put the sale process on hold in January this year pending examination of specific allegations regarding the bidder.
The sale of CEL to a lesser-known firm, Nandal Finance & Leasing Pvt Ltd, was challenged by CEL's employee unions in the Delhi High Court. They had raised concerns over the selection of the successful bidder on the grounds that the firm did not have any expertise in the electronics sector, while CEL had been involved in making critical components required for defence equipment manufactured in India. As the case was being heard in the court, the DIPAM had announced that it has put the privatisation process on hold to examine the allegations levelled against the bidder.