IDBI Bank bidders need MHA Security Clearance at the first stage of the bidding process

Earlier in all cases of privatization of Central Public Sector Enterprises (CPSEs), the government would seek security clearance in the second phase of the process.

This meant that the bidders who had qualified in the first or the Expression of Interest (EoI) round would have to take security clearance from the government while placing their financial bids.

The Central Government and Life Insurance Corporation of India (LIC) on Friday said that they will jointly sell 60.72 per cent stake in the company. IDBI Bank,

While inviting EOIs from the bidders, the Department of Investment and Public Asset Management (Deepam) said that the Interested Parties (IPs) who undergo a ‘fit and proper’ assessment by RBI and security clearance by the Government/MHA shall be notified as Qualified Interested Parties (QIPs).

Only the QIP will have access to the data room of IDBI Bank, after which they do the financial bidding.

Interested parties and its directors and shareholders who hold more than 10 percent stake, or who have significant influence, have a self-determination as to whether they are subject to preventive detention proceedings under the Public Safety Act or the National Security Act, criminal investigations. Declaration has to be submitted. In which charge sheet has been filed in India or any other foreign country.

The last date for bidding is 16 December. The interested parties and each member of the consortium will have to give a declaration or detailed disclosure on the order/pending investigation/proceedings by any court and regulatory authority at the time of submission of EOI.

They must certify that there is no investigation pending by the regulatory authority against them or any of the associate companies or against any directors, chief executive officers (CEOs), or other key managerial personnel.

The need for clear disclosure on pending investigation follows two cases of privatization of CPSEs which saw non-disclosure by the winning bidder in respect of cases pending in NCLT and NCLAT.

In the case of Central Electronics Limited, the government has terminated the sale of its 100 per cent stake and has disqualified the successful bidder Nandlal Finance & Leasing Pvt Ltd.

The matter of strategic sale of Pawan Hans also pending NCLT case against Almas Global Opportunity Fund SPC, a key member of the winning bidder association, was not disclosed at the time of bidding.