OTHERS

Tata-SIA sole bidder for AI

NEW DELHI, JULY 6. The Government today disqualified both the bidders - the Hindujas and Videocon - for Indian Airlines disinvestment, leaving Tata-Singapore Airlines as the sole bidder for Air India. The Hindujas, only other bidder for Air India, have been kept out of the reckoning for both the airlines.

In addition, Sterlite Industries, which has already bought Bharat Aluminium Corporation Limited, will be kept out of the bidding for both Hindustan Zinc Limited and Hindustan Copper Limited. In the case of BPL, however, it will remain a bidder for disinvestment of the Videsh Sanchar Nigam Limited, even though one of its sister concerns has been indicted by the Securities and Exchange Board of India (SEBI).

As for global advisers, tough guidelines have been framed for disqualification. The case of Credit Suisse First Boston, adviser for VSNL, has been referred to a Committee of Secretaries.

These decisions were taken here today by the Cabinet Committee on Disinvestment (CCD) and the Cabinet Committee on Security (CCS). The CCD laid down the guidelines for disqualification of both bidders and global advisors for all cases, while the CCS took up the specific cases of bidders and advisers for Air India and the Indian Airlines.

Briefing newspersons, the Disinvestment Minister, Mr. Arun Shourie, said that with only Tata-SIA left to bid for Air India, the CCD would take a decision in case the price offered was higher than the reserve price. As for Indian Airlines, the issue would be reviewed as both bidders - Videocon and Hindujas - had been disqualified.

Mr. Shourie said the CCS disqualified the Hindujas from bidding, both for Air India and Indian Airlines, on security considerations. It was based on the guidelines laid down earlier by the CCD, stipulating that in matters concerning the country's security and integrity, bidders could be disqualified on the basis of a chargesheet for an offence by a regulatory agency.

In the other cases, the decisions were taken by the CCD, taking into account SEBI's indictment of three companies preventing them from accessing capital markets. On this count, Sterlite Industries was ruled out of bidding for HZL or HCL while Videocon was eliminated from bidding for Indian Airlines.

Mr. Shourie had no clear answer for referring the CSFB case to a committee of secretaries even though guidelines for disqualification had been framed. He merely said in jest ``this is our policy.''

Outlining the guidelines for disqualifying bidders, he said on matters other than the country's security, any conviction by a court or indictment by a regulatory authority for a ``grave offence'' or one casting doubts on the ability of the bidders to manage the company after disinvestment would be sufficient. A ``grave offence'' would be one which ``outrages the moral sense of the community.'' A decision regarding the nature of the offence would be taken case by case based on the guidelines.

In matters regarding the country's security, however, the company and its sister concerns would be disqualified in case they had been chargesheeted by an agency or convicted by a court.