In a setback to the strategic disinvestment drive, the Centre has decided not to proceed with privatisation of Central Electronics due to questions raised on the integrity of the winning bidders, sources told FE.
The privatisation of the company was seen to be in the interest of employees as new investors would have infused more funds to turn around the businesses. No decision has yet been taken on whether the government will restart the privatisation process of the company.
According to the government’s strategic disinvestment guidelines: “any charge-sheet by any governmental authority/conviction by a court of law for an offence committed by the interested bidder or any of the members of the consortium or by any of their respective sister concerns or any of their promoters, promoter group and directors would result in disqualification.”
In January this year, the government also put on hold the sale of Central Electronics Ltd (CEL) to a Delhi-based firm Nandal Finance and Leasing following allegations of undervaluation by the employees’ association.
On November 29, the empowered ministerial panel approved the highest price bid of Nandal Finance and Leasing for the sale of 100% government stake in CEL for Rs 210 crore.
In December, the opposition Congress party had alleged undervaluation of CEL and opposed it being sold to a firm which has “no domain experience”. CEL, under the ministry of science & technology, works to commercially exploit indigenous technologies developed by national laboratories and R&D institutions in the country. Even though the firm is profitable (Rs 23 crore in FY21), its sales are largely to other state-run entities, seen as a vulnerability in open market conditions. Financial Express