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The stake sale process of Haldia Petrochemicals has all the makings of a blockbuster Bollywood drama.
A hide-and-seek game by the West Bengal government, postponement of the opening of price bids and Mukesh Ambani-led Reliance Industries showing its hand only after the deadline for making bids, reportedly pushed by calls from the chief minister’s new office, were among Monday’s components.
Till 11 am on Monday, the sole bidder for the 40 per cent stake owned by the state government in eastern India’s largest petrochemical company was only Indian Oil Corporation. After the deadline was over, the CM’s office had reportedly sprung into action with calls made to the Ambani company. Following this, a few hours after the deadline was over, RIL came into the fray again.
While state industries minister and HPL chairman Partha Chatterjee denied knowledge of such a series of events, he told reporters on Monday that he would not disclose the number of bids received. “I would not comment whether we have got one or more than one bid,” he had said.
One of the members of group of ministers on HPL, said “There is one formal bid from IOC but some communication was made by a private company after the bidding was over. The matter will be discussed in the GoM meeting tomorrow.”
Sources reveal it was because of RIL’s late entry that the government and transaction advisor Deloitte did not open the price bid on Monday. In the revised share purchase agreement, these were to be opened on the evening of the same day of filing.
The scene at the West Bengal Industrial Development Corporation building, in the heart of the city, was like a thriller. Managing Director Krishna Gupta made it a point to avoid all queries regarding RIL’s infiltration at the last minute.
Another WBIDC official who handles the stake sale said, “The signals are more than telling. Things like a government stake sale don't get delayed for no reason on a day you are supposed to announce the final name.”
A visible change was in RIL’s response to the media, too. While the company categorically mentioned its non-participation till the evening before, it told Business Standard on Tuesday, “It is upon the state government to take a call. We are neither confirming nor denying about our participation in the bidding process. The final answer would come from the government.” According to WBIDC sources, it would take at least a few days to come out with an announcement in this regard.
One of the entities which participated in the pre-bid meeting highlighted there was no mention of a reserve price, normally mentioned in competitive bidding procedures, raising concerns about the validity of the bids. “The government did not open the bid on the same day. This is a sort of default from their part. We are not looking to take any legal opinion at the moment but there have been procedural faults,” an IOC official said.
IOC currently has an 8.8 per cent stake in HPL. There was also speculation about a possible re-tendering if the process appears to be invalid, with the government going back on clauses in the revised share purchase agreement.
GENERATING EXCESS HEAT?
* Sources reveal that because of RIL's late entry, the government and transaction advisor Deloitte did not open the price bid on Monday
* No mention of the reserve price has also raised concerns about the validity of the bids
* RIL, in a statement, said it was neither confirming nor denying its participation in the bidding process
This article has been modified to incorporate a correction
