Badal govt orders probe into PTL deal

A day after Mahindra & Mahindra won the race for Punjab Tractors Ltd, the newly formed Parkash Singh Badal government in Punjab has ordered an enquiry into the 2003 divestment of the company to private investors.

At that time, when the Amarinder Singh-led Congress government was in power, Badal's Shiromani Akali Dal had opposed it on the ground that there was only one bidder for the company.

A statement from the Punjab government said that in case the enquiry supported the contention, it will declare the sale illegal and take back the management of the company from the buyers.

The government also cautioned that those participating in any fresh sale of Punjab Tractors stake will be doing so at their own risk.

In 2003, the Amarinder Singh government had divested 29.5 per cent in Punjab Tractors Ltd in favour of CDC Capital (now known as Actis) at Rs 153 per equity share. The Akali Dal had criticised the deal alleging that it was underpriced. About a year ago, the Burmans had bought 14 per cent in the company at an average price of Rs 220 per share.

Mahindra & Mahindra is now acquiring the shares held by Actis and the Burmans at Rs 360 apiece, pegging the total deal size at about Rs 1,000 crore.