Public Sector

The Pinarayi Vijayan government told the Supreme Court that preference was given to the Adani Group despite the private concessionaire having no experience in managing airports. It said the decision “smacks of arbitrariness”.

https://thewire.in/law/sc-dismisses-kerala-govts-plea-against-adani-groups-takeover-of-thiruvananthapuram-airport 

It also alleged that the decision to hand over the airport to the Adani group was not in the public interest, alleging that the entire procedure, including tender processes, was “vitiated by malafides” and in violation of the provisions of the Airports Authority of India Act, 1994, and the proprietary rights of the state government with regard to the land on which the Thiruvananthapuram Airport stood.

18/10/2022

Understanding Deregulation, Privatisation & Economic Reforms: What derailed the Indian economy? By Thomas Franco | September 20, 2022   https://www.cenfa.org/understanding-deregulation-privatisation-economic-reforms-what-derailed-the-indian-economy/ 

From the year 2014 onwards, everything took a turn for the worse. “The government has no reason to be in business….. The public sector was born to die,” declared the Prime Minister. Demonetization in 2016 triggered an economic eruption. GST – The Goods and Services Tax (GST) was implemented in July 2017 amid widespread misunderstanding. NITI Aayog, which is operating as Aniti Aayog, claims that it seeks to promote 5-6 Global Champions to lead the economy. Covid-19 and the unannounced lockdown decimated MSMEs and jobs. The freebie’s argument has now begun. It is handouts for the poor, but it is commercial support for corporations. The Asset Monetisation-National Monetisation Pipeline represents a complete sale of the family silver. The MANTRA-Fascism is rising in popularity among rulers and their masters. Savarkar, Gowalkar, and others’ ideologies encourage the rich, promote caste inequality, and use religion to separate people, although every religion promotes unity.

Today, education, health care, banking, life insurance, and railways are privatised. If we do not fight today, our children will not have a tomorrow.

To repair the present, we must battle against the government’s policies. The public sector and public services can create jobs and save the country.

Pawan Hans Sale: Cayman Firm in Winning Bid Flayed By NCLT for Failure to Pay, Show Funding Plan  https://thewire.in/business/pawan-hans-sale-cayman-firm-nclt Pawan Hans Sale: Cayman Firm in Winning Bid Flayed By NCLT 
The privatisation of the public sector helicopter operator raises questions that the government so far has refused to answer. An investigation by The Wire and NewsClick.

A Ministry of Finance press release stated: “The strategic disinvestment transaction was implemented through an open, competitive bidding process supported by a multi-layered consultative decision making mechanism involving (an) Inter-Ministerial Group, (a) Core Group of Secretaries on Disinvestment and the empowered Alternative Mechanism.”

Our investigation shows that this ‘transparent’ decision based on a “multi-layered consultation” has resulted in the purchase of Pawan Hans by a consortium whose leading stakeholders have placed little or no information in the public domain about themselves and their ability to run such a company. In fact, the largest stakeholder in the consortium has been sanctioned by the National Company Law Tribunal (NCLT) and it is not clear whether it has fully met the eligibility criteria laid down by the government for bidders.

This is not the first time the Narendra Modi government’s sale of government assets to private companies has raised questions about the new owners. In January, the government was forced to put on hold the sale of Central Electronics Limited after doubts were raised about the winning bidder’s financial track record, the cases pending against it in the NCLT and questionable inter-connections among bidders.

https://theprobe.in/pawan-hans-sale-cayman-islands-company-in-winning-bid-allegedly-fronted-for-notorious-businessman-from-zimbabwe/ On 18 May, it was reported that AGOF would challenge the NCLT order in the National Company Law Appellate Tribunal (NCLAT), saying that the NCLT order was “abrupt and a bit premature.” The Economic Times quoted the fund’s spokesperson as saying, “AGOF is a fund with a pristine reputation.

Was this information known to the Narendra Modi government while it evaluated the bid by Star9 Mobility (in which AGOF holds the largest stake of 49%) to acquire Pawan Hans and found it to be the best and highest offer? Did DIPAM and other agencies of the Indian government that was involved in the evaluation of the bids know the identities of the real investors and ultimate beneficiaries of AGOF? Does Almas Global still have links to Tagwirei? Did the other two partners in the Star9 Mobility consortium – Maharaja Aviation Private Limited and Big Charter Private Limited – know about the source of funds for AGOF?

This is not the first time a disinvestment exercise of the Government of India has come under scrutiny after completion of the process because of allegations against the reputation of the winning bidder. In January this year, the government had pulled the brakes on the privatisation of Central Electronics Limited (CEL) after its employees’ union moved court against the sale of the company to a little-known firm.

The government has not yet clarified whether Star9 Mobility was an eligible bidder before it was declared the winning bidder. The preliminary information memorandum for inviting expressions of interest in the “strategic disinvestment” of shares of the government of India in Pawan Hans stated that “Alternative Investment Funds (AIF) registered with (the Securities and Exchange Board of India) SEBI as per SEBI (Alternative Investment Funds) Regulations, 2012 are eligible to participate in the bid provided the concerned AIF has obtained “all statutory approvals” from the relevant ministry in the government of India, the Foreign Investment Promotion Board, the Directorate General of Civil Aviation, the Reserve Bank of India and so on.

LIC IPO: How is it the biggest privatisation scam in India? Interview with V Sridhar, member of the People’s Commission on Public Sector and Public Services  Sarah Thanawala·May 13, 2022  https://theleaflet.in/lic-ipo-how-is-it-the-biggest-privatisation-scam-in-india/

The life insurance business was historically and typically structured as a mutual company where profits that arose were distributed amongst the shareholders; there was no appropriation of profits by an external source.

However, after the changes introduced in the Finance Act of 2021, the government has asserted its rights as a shareholder. These changes were introduced explicitly in order to help it divest its “stake” in the LIC. Prior to the 2021 amendment, 95 per cent of the profits from the consolidated corpus, including profits from non-participatory policies, were distributed to the policyholders. However, the amendments take these surpluses away from policyholders and transfer them to the shareholders, including the new shareholders after the IPO. 

In effect, policyholders provided the risk capital for the LIC’s expansion for most of its life.