IDBI Bk stake sale followed laid down process: Govt

NEW DELHI: Amid protests by unions and political parties, govt on Thursday asserted that sale of its stake in IDBI Bank, as part of the “strategic restructuring”, was in line with the process provided for in the request for proposal (RFP) and the decision was taken following approval by a panel of secretaries, after approval by the cabinet committee on economic affairs.The IDBI Bank process had to be called off earlier this year as the bids were far below the reserve price and govt subsequently invited fresh bids from the two players in the fray and relied on two valuation methods before deciding to sell the stake to Fairfax Holdings.In a statement, it said the first round was in line with its internal practices, which are in the nature of indicative guidelines and not hidebound rules or regulations. “The foreword itself states that the procedure suggested is not to be construed as a rigid, legal framework, which may require due adaptation/ modification in the best interest of successful execution of the transaction in a time bound manner. Given the complex nature of strategic transactions, the indicative guidelines give flexibility to ensure cost and time spent in lengthy processes is not wasted,” it said.It also said RFP provided for ways to deal with the situation. “In the event the financial bid of the highest bidder is lower than the reserve price, Gol will decide the further course of action and the QIPs shall not subsequently question any decision taken by the Gol in this regard.” The finance ministry said the issue was referred to CoS and CCEA which “empowered CGD to remove all difficulties, including deviations from procedure, to ensure effective implementation of the strategic disinvestment transactions…”It said core group reviewed valuation methodology in April before inviting best offer bids. “The process remained double blind because the bidder did not know valuation and valuators did not see bids. Only CGD gets to see a complete picture and compares bids with fair valuations to take a final call on reasonableness of bids submitted.”You use AI every day. Now get your AI Quotient. Take the AIQ test.