After a previous privatization attempt by failed to take off in 2019, the Centre initiated the process in February 2020. The government of India has put on hold the the Letter of Intent (LoI) to the successful bidder of Central Electronics Ltd (CEL)
The government of India has put on hold the the Letter of Intent (LoI) to the successful bidder of Central Electronics Ltd (CEL). The same has been done on basis of pending examination of specific allegations regarding the bidder. These developments were submitted by the Minister of State for Finance Bhagwat Kishanrao Karad in written reply to a question raised in the Rajya Sabha.
The minister was replying to a question on whether the CEL bid was won by a furniture making company named Nandal Finance and Leasing Ltd. The government of India, in November 2021, had approved the highest price bid of Rs 210 crore. This bid was submitted by the Delhi-based Nandal Finance and Leasing Pvt Ltd. The bid invited were for the sale of 100 per cent equity shareholding of the government of India in CEL.
Gourav Vallabh, Congress spokesperson, in a recent press conference had claimed that the valuation of the CEL was between Rs 957 Cr and Rs 1,600 Cr. Congress also claims that the company that has bought CEL only employs 10 people, and also has a case pending against it in the National Company Law Appellate Tribunal. Vallabh also claims that the cost of land owned by CEL is alone more than what the government has sold the PSU for. It is worth mentioning here that CEL owns owns 2.02 lakh square meters of land in Ghaziabad, Uttar Pradesh. The value of this land, as per Vallabh, is Rs 440 Cr.
“We demand that this sale be stopped. The promoters of Nandal Finance are also linked to a private university in Noida-Ghaziabad region and are known for their proximity to BJP leaders,” Vallabh had said.
He had added, “The government has sold a strategic PSU manufacturing satellite system, electric generator fuse for hand grenades and bullet proof materials for body armours to a furniture company.”
The government, in an official statement, had said the decision was taken by a committee comprising of Union ministers Nitin Gadkari, Nirmala Sitharaman, and Jitendra Singh. The reserve price for the deal was Rs 194 crore and the government received financial bids of Rs 210 crore from Nandal Finance and Leasing Pvt. Ltd and for Rs 190 crore from JPM Industries Ltd.
The process to divest the government’s stake in the company had started in 2016. After a previous privatization attempt by failed to take off in 2019, the Centre initiated the process in February 2020 through a preliminary information memorandum and a request for expressions of interest.