Central Electronics Limited stall at an exhibition. Image Courtesy: Facebook
New Delhi: The employees union of Central Electronics Limited (CEL) have resolve to continue their fight against the disinvestment of the Sahibabad-based public sector enterprise even as latest media reports indicate that the Centre has decided to scrap the sale deal for now.
The Centre has decided to scrap the sale of CEL to Nandal Finance and Leasingprivate Limited as the bidder failed to disclose its ongoing litigation in the National Company Law Tribunal (NCLT), news agency PTI reported quoting a government official earlier this week.
The official, according to the report, said that an insolvency case is pending against the bidder in the NCLT that Nandal Finance hadn’t disclosed at the time of bidding for CEL, and it is in violation of disinvestment guidelines.
CEL Employees Union vice-president TK Thomas told Newsclick over the phone that the union is “cautious enough” since the development does not amount to the withdrawal of the decision to disinvest CEL. “The union will continue to fight against the disinvestment of CEL. It is a profit-making company which must remain in public hands,” he said.
The Centre had approved the strategic disinvestment for Rs 210 crore last November when Nandal Finance had won the bid for sale of 100% equity shareholding in the public sector unit.
In January, the government, however, decided to put brakes on the privatisation of CEL after the employees union approached the Delhi High Court highlighting irregularities in the sale process. In two separate petitions, the union alleged that the expression of interest criteria was “diluted” and Nandal Finance “have poor credentials”.
The decision to scrap the sale highlights that the union’s allegations “hold truth”, Thomas said. “Further, in order to save its own reputation, the DIPAM (Department of Investment and Public Asset Management) would have now decided to scrap the whole deal,” he said adding, “This, however, does not mean that the decision to privatise CEL is withdrawn. We are cautious enough to know that.”
In-principle approval for the disinvestment was given by the Cabinet Committee on Economic Affairs back in 2016. In the first iteration, due process was followed for the strategic sale of CEL and a ‘request for proposal’ document was shared with the qualified institutional buyers in May 2019. However, no financial bids were received and the process subsequently relaunched in February 2020.
Thomas cautioned that the process can “always be relaunched again”. “The employees union will request the [Delhi High] court to grant permission to us to once again file a petition against the disinvestment of CEL, in case, such a situation arises,” he said.
The next date of hearing is scheduled for October 6 with the union expecting a response from the Centre informing the court about the scrapping of the sale deal. The union is planning to place its request that time.
Functioning under the Department of Scientific and Industrial Research, the ministry of science and technology, CEL was established in 1974 to commercially export indigenous technology developed by national laboratories and R&D institutions. Over the years, the company has also developed a number of products for the first time in the country through its R&D efforts.
Courtesy: Newsclick