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Govt issues show-cause notices to Hindujas, Sterlite, CSFB

The government on Wednesday issued show-cause notices to Hindujas, Sterlite Industries and Credit Suisse First Boston to explain as to why they should not be disqualified from participating in the process of privatisation of PSUs.

The government asked these companies, involved in some cases, to explain within 15 days their position, official sources said.

Sterlite Industries, which recently grabbed 51 per cent government equity in Balco, is the front-runner for Hindustan Cables, Hindustan Copper and Hindustan Zinc.

Videocon, which is the other company named by Sebi, has said that it would take a decision in a day or two on continuing its bid in VSNL, but sources in government said it was almost certain that consumer durable major would withdraw its bid from VSNL and therefore notice to it was not issued.

On July 13, government announced guidelines for advisors and bidders' participation in divestment of PSUs.

As per the guidelines, "any conviction in a court of law or indictment/adverse order by a regulatory authority for a grave offence against the advising concern and its sister concerns would constitute a disqualification".

Regarding bidders, the guidelines said "in relation to matters other than the security and integrity of the country, any conviction or indictment/adverse order by a regulatory authority that constitutes doubt on the ability of the bidder to manage the PSU when it is divested" would be a disqualification.

On security issues, the guidelines said any chargesheet by an agency of government/conviction by a court of law for an offence committed by the bidding partner or by any of its sister concern would result in disqualification.

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