IDBI Bank bidders must apply for MHA security clearance in the bidding process
As a first step, the government has made it compulsory for interested buyers of IDBI Bank to provide details of the Ministry of Home Affairs (MHA) security clearance during the first stage of the bidding process. .
Until now, in all CPSE privatization cases, the government sought details regarding the security clearance of bidders during the second stage of the bidding process.
This meant that qualified bidders in the first round or the Expression of Interest (EoI) round had to apply for government security clearance when submitting their financial bids.
Inviting bidders to express their interest in buying the government’s and LIC’s 60.72% stake in IDBI Bank, the Department of Investment and Public Assets Management (DIPAM) said interested parties (IP) have approved “Fit & Proper” assessment by RBI and Government Security Clearance/MHA must be notified as Qualified Interested Parties (QIP).
Only QIPs will have access to IDBI Bank’s data room for due diligence, after which they will submit financial offers.
Interested parties and its directors and shareholders holding more than 10% or exercising significant influence will be required to submit a self-declaration indicating whether they are subject to preventive detention proceedings under the Public Security Law or national security law, criminal investigation in which the indictment was filed in India or any other foreign country.
Last week, DIPAM invited the EoIs of potential bidders of IDBI Bank to offer to sell 60.72% of the capital with LIC. The deadline for submitting offers is December 16.
In addition, Interested Parties and each Consortium Member should make a statement or make a detailed disclosure upon order/pending investigation/proceeding by any court/regulatory authority/SFIO/NCLT/NCLAT, when submitting the Protest. ‘interest.
They must certify that no investigation by a regulatory authority is pending against them or any associated companies, or against any of the directors, CEOs or other key management personnel.
The requirement for clear disclosure on ongoing investigations follows two CPSE privatization cases that saw non-disclosure by the successful bidder regarding ongoing business in the NCLT and NCLAT.
In the case of Central Electronics Ltd, the government halted the sale of its 100% stake and disqualified the winning bidder Nandlal Finance and Leasing Private Ltd.
In the case of the strategic sale of Pawan Hans, the pending NCLT case against Almas Global Opportunity Fund SPC, the lead member of the successful bidding consortium, was not disclosed at the time of the bid submission.
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