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June 26, 2001
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Money > Business Headlines > Report June 26, 2001 |
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Videocon, Sterlite may be out of divestment raceMamata Singh The norms for disqualification of bidders finalised by the department of divestment mean that Videocon is out of the bidding for the government stake in Indian Airlines. Another casualty is Sterlite Industries Ltd, which was looking for a stake in Hindustan Zinc Ltd. BPL will, however, still be able to bid for Videsh Sanchar Nigam Ltd as the company, which has bid for the government stake is different from the one named in the Securities and Exchanges Board of India order. The norms formulated by the DoD specify that in the case of bidders, the government will only bar specific companies named in Sebi orders and not the sister companies of the group. The norms, however, are still to be cleared by the Cabinet Committee on Divestment. As per the norms for disqualification of merchant bankers from the position of advisor, Credit Suisse First Boston will be removed in the case of VSNL. SBI Caps, the other bank in the consortium, which bagged the mandate to handle the VSNL sale, will deal with the case independently. However, the norms for disqualification of bidders, finalised by the DoD, have been opposed by the law ministry, which feels that they are too wide ranging. Currently, the DoD has listed five cases in which companies should be disqualified from bidding. These include cases of fraud, dishonest behaviour and price rigging. The idea is to keep out companies who show a "particular kind of behaviour" with respect to investors, say officials in the divestment department. The law ministry is, however, of the view that these criteria are too wide ranging and that the list needs to be made more specific. In specific detail, the DoD has recommended that any company against whom Sebi or the Reserve Bank of India has passed strictures should be barred from the process. Sebi's orders are particularly important, as one of its jobs is to protect the interests of small investors. Any company attempting to defraud small investors should be kept out of the process, officials added. Powered by YOU MAY ALSO WANT TO READ:
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