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.