CEL selloff on hold over employees’ charges

The government has put on hold the privatisation of Central Electronics Ltd (CEL) and is examining various allegations made by the firm’s employees’ association.

“The letter of intent (LoI) for sale of 100% government shareholding in CEL to Nandal Finance & Leasing has not been issued, as the allegations are being examined,” said Tuhin Kanta Pandey, secretary, Department of Investment and Public Asset Management (DIPAM).

An inter-ministerial group on disinvestment is examining the allegations, he said on Wednesday.

The government had approved the sale of CEL for ₹210 crore in November last year. The transaction was scheduled to be completed by March 2022.

Employees’ association of CEL, which comes under the Department of Scientific and Industrial Research (DSIR), had approached the Delhi High Court against its privatisation, and made various allegations including that the company is being undervalued.

The government is examining two of those allegations, an official aware of the developments told ET. One is that the two companies that put in financial bid for CEL – Nandal Finance and JPM Industries Ltd – are inter-related by virtue of one common director in group companies, and the other is that there’s a case pending against the successful bidder in the National Company Law Appellate Tribunal (NCLAT), the person said.

The official, however, said allegations about valuations were baseless, adding that CEL’s valuation had been done by the transaction advisor and asset valuer, following which the government arrived at the reserve price of ₹ 194 crore for the company.

Two different advisers had provided valuation based on standard DIPAM methodology, the person said. “It has been carefully gone into. Wrong facts are being alleged. Land is not freehold, but leasehold. Out of 90 years of lease, 46 years already over, only 44 years remain,” the official said.

Under asset valuation method for net asset value, liabilities have to be excluded from asset value, the person said.

Last week, the Delhi HC had dismissed a petition by BJP leader Subramanian Swamy for setting aside AI disinvestment process.

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