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Hindujas may withdraw from Air-India bid if terms not met

One of the only two bidders for a 40 per cent stake in Air-India indicated on Friday it may withdraw if key clauses concerning management are not accepted by the Indian government.

"In case some of our key clauses relating to management are not accepted, we will have to seriously review our position," R J Shahaney, the chairman of Madras-based bus and truck maker Ashok Leyland, said.

He did not specify what the clauses are.

Ashok Leyland is controlled by the UK-based billionaire Hinduja brothers, and submitted one of the two bids received by New Delhi for the stake the government is selling in the money-losing airline.

Singapore Airlines, in tandem with Tata group, submitted the other bid.

Both sets of bidders have finished inspecting the airline's financial records and inner workings, and have sent their comments regarding a shareholders' agreement to the government.

The shareholders' agreement and the share purchase agreement will spell out the crucial issue of how much management control the success bidder will have in the airline.

Long-held concerns that the government will continue to meddle in the airline's functioning sprang up again last month, when civil aviation minister Sharad Yadav suspended Air-India's independence-seeking chief.

No airline partner

The Ashok Leyland chairman said that his company will not rope in any foreign airline for its bid.

"We have decided we don't need a foreign airline partner. We believe sufficient expertise exists with senior management of Air India. In specific areas, we can take help from outside agencies," Shahaney said.

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