Financial Daily from THE HINDU group of publications
Friday, May 31, 2002
Industry & Economy - Disinvestment
Ministry seeks security clearance of SCI bidders
NEW DELHI, May 30
THE Ministry of Disinvestment has sought security clearance of all the seven bidders who are in the fray for acquiring a controlling stake of 51 per cent in Shipping Corporation of India (SCI).
"Being the national flag carrier which transports a large portion of the crude oil cargo imported into the country, it is essential for the Government to take security clearance before proceeding with the bidding process'', a senior government official said.
A clearance from the national security point of view was also necessary as merchant navy was considered the fourth arm of defence, the official pointed out. similar exercise was carried out by the Ministry of Disinvestment when Air India and Indian Airlines were put up for strategic sales last year.
Besides seeking security clearance of bidders from various intelligence agencies in the country coming under the Union Home Ministry, the Disinvestment Ministry will have to take the consent of the Cabinet Committee on Security (CCS) on going ahead with the deal.
Great Eastern Shipping Company Ltd, Essar Shipping Ltd, Sterlite Industries Ltd, BPL, Iffco-Kribhco, Aban Loyd-Qatar Shipping Company Ltd and Malaysian International Shipping Corporation Bhd have carried out the first round of due diligence of SCI which was held between April 29 and May 18.
Meanwhile, the Government has indicated that the process of privatising SCI would be delayed by at least two months. "The deal is now expected to be concluded either in late August or in early September'', the official said.
The Disinvestment Ministry had earlier set a June 25 deadline to finalise the private strategic partner for SCI.
The re-scheduling is attributed mainly to the delay in finalising the accounts of SCI for the fiscal 2001-2002.
"Once the audited accounts are approved by the board of SCI, each bidder would be given two days to scrutinise the books of accounts of the company, starting from June 18'', the official said.
Besides, the bidders have also been permitted to undertake physical verification of a few selected vessels belonging to SCI falling under different categories as well as the class records of these vessels.
The Government will also have to sort out the lease deeds concerning SCI's shipping house and other properties of the company which were set up with the land given on lease by the Mumbai Port Trust.
SCI owns a 19-floor building in Central Mumbai, a 25-flat housing society in South Mumbai, another property in Powai and a 13-floor office building in Kolkata.
The Government was expected to take time in sorting out these issues before financial bids could be invited from the short-listed bidders, the official said.
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