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Hindujas term DoD show cause notice 'malafide'

A Hinduja group company on Friday severely criticised the government and termed the show cause issued on their bids for stake in Air India and Indian Airlines as "abitrary, malafide and defamatory" and demanded immediate withdrawal of the same.

"We have legal recourse open to us," chairman of Ashok Leyland and the consortium bidding for the airlines R J Shahaney told PTI from Madras and added that "we have replied to the show cause notices issued by department of divestment on our bids for the two airlines."

DoD had asked the consortium to show cause as to why it should not be disqualified from participating in the bidding process for IA and AI as Hinduja Group was under probe by CBI for their alleged involvement in the 'Bofors deal'.

He, however, declined comment on whether the group would press for its case in court in case the government decided to disqualify their bid for wresting control of both AI and IA, slated for privatisation.

In reply to the show cause notices issued by DoD last month, Shahaney wrote to divestment secretary Pradeep Baijal saying, "the course of events for the last few months give a clear impression of the negative attitude of the government with reference to our bid."

In the reply dated August 6, he said "if the attitude and approach of the government is to somehow or the other disqualify us, then it would only be appropriate on our part to disassociate ourselves from this process."

Shahaney said, "The Hindujas group is not, as alleged, under any investigation by the CBI for it's alleged involvement in the Bofors deal and the chargesheet (police report) against the three Hinduja brothers does not contain any allegations in respect of national interest or security of the nation."

Terming the reasons cited by DoD for disqualification of the consortium from bidding for the two airlines as a "new one", he said "introduction of the new guidelines for disqualification of bids, when the bidding process is almost complete, is arbitrary and unreasonable and tantamount to changing the rules of the game when the game is nearly over."

In case the government decides to disqualify the bids of the consortium, only Tata-SIA combine would remain in the race for Air India while there would not be any bidder for Indian Airlines as Videocon has opted out from IA race after it was named in the share-price manipulation by Sebi.

Shahaney said that the show cause notice did not make a case against AL (Ashok Leyland) Consortium as there was 'no chargesheet against the consortium or any of its constituents or their sister concerns."

Referring to statement of July 6 made by Divestment Minister Arun Shourie, he regretted that "we cannot escape the conclusion that you have already made up your mind, even before the issue of the show cause notice and without waiting for a response, that we stand disqualified."

Shahaney said that the guidelines, under which the consortium was issued show cause notices, were 'bad at law and violated various constitutional provisions' and were not applicable to AL consortium.

The consortium chief wondered as to why they were given access to data room records saying it was "our understanding that only those bidders who are cleared by Cabinet Committee on Security would be given access to data room records."

He said "in any case, the offence for which the Hinduja brothers have been alleged to have been chargesheeted is not a matter pertaining to the security and integrity of the country."

Shahaney said that as such none of the three Hinduja brothers are either shareholders or directors in any of the corporate entities of AL Consortium comprising Ashok Leyland, Machen Development Corporation and Hinduja Finance Corporation, and wondered how it could be disqualified on the basis of chargesheet against individuals.

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