PRELIMINARY INFORMATION MEMORANDUM (PIM)

 OF

HOOGHLY PRINTING COMPANY LIMITED

(HPCL)

 

1.                  A.F.Ferguson & Co. (AFF)  has prepared this Preliminary Information Memorandum (PIM) on the basis of information provided by Andrew Yule and Company Limited (AYCL)  and Hooghly Printing Company Limited (HPCL ). The sole purpose of this PIM is to assist the recipient interested in being the ‘Strategic Investor’ to participate in the aforesaid disinvestment process .

2.                  This document is not intended to form the basis of any investment decision or any decision to purchase any securities or any decision to participate in the process. It does not constitute an offer or invitation or solicitation of an offer, to subscribe to or purchase any securities.

3.                  While this document has been prepared in good faith, no representation or warranty, express or implied, is or will be made, and no responsibility or liability will be accepted by GOI, AYCL,HPCL or AFF or any of their employees, advisors or agents as to or in relation to the accuracy or completeness of this document or any other oral or written information made available to any interested recipient or its advisors at any time during the disinvestment process and any liability thereof is hereby expressly disclaimed. Any liability is accordingly expressly disclaimed even if any loss or damage is caused by any act or omission on part of the aforesaid, whether negligent or otherwise.

4.                  Neither this document nor anything contained herein shall form a basis of any contract or commitment whatsoever. Any prospective purchaser will be required to acknowledge in the purchase contract that he has not relied on or been induced to enter such agreements by any representation or warranty, save as expressly set out in such an agreement.

5.                  Accordingly, interested parties are advised to carry out their own due diligence, investigations and analysis of any information contained or referred to herein or made available at any stage in the disinvestment process.

6.                  GOI, AYCL, HPCL and AFF undertake no obligation to provide the recipient with any additional information or update this document and reserve the right, at any time and without notice, to change or modify the procedure or process for disinvestment, terminate the due diligence or negotiations or any part of or the entire disinvestment process.

7.                  This document has not been filed, registered or approved in any jurisdiction. Recipients of this document, particularly in jurisdictions outside India, should inform themselves of and observe any applicable legal requirements.

2.1    Introduction

1          Hooghly Printing Company Ltd. (HPCL) was incorporated on January 3, 1922 as a wholly owned subsidiary of Andrew Yule Company Limited (a public sector undertaking), in the state of West Bengal in India. As a part of the disinvestment programme of the Government of India (GOI), AYCL intends to disinvest 100% equity in Hooghly Printing Co. Ltd. (HPCL) to a strategic investor.

2          A. F. Ferguson & Co. (AFF) have been retained as advisors to the AYCL / GOI for the proposed disinvestment process and matters relating thereto.

2.2    Advertisement inviting EOI

3          An advertisement has been issued in the newspapers inviting interested parties to submit their ‘Expression of Interest’ (EOI) to participate in the disinvestment process, a copy of which is enclosed as Annexure I.

2.3    Pre Qualification Criteria

4          The interested party (ies) must have:

I           Net Worth (excluding revaluation reserves) of atleast Rs.100 Lakhs and a satisfactory business and management track record.

1.         For a consortium bid, the combined  Net Worth of the constituent entities of the consortium should meet the above mentioned eligibility criteria to participate in the proposed transaction.

2.         In case of a consortium bid, the leader of the consortium should meet at least 51% of the above mentioned eligibility criteria.

3.         Definition

a.       Net Worth = Equity Share Capital + Reserves (excluding revaluation reserves)

2.4    Format and submission of EOI

5          EOI may be submitted by any person or entity (whether currently in existence or to be formed specifically to acquire 100% equity in HPCL) either individually or as a consortium.

6.         The interested parties should submit the EOI package comprising an “Expression of Interest” as per Annexure II, “Statement of Legal Capacity” as per Annexure III and the ‘Request for Qualification’ (RFQ) as per Annexure- IV duly signed by the interested party(ies)/designated lead bidder of the consortium.  However, the Statement of Legal Capacity and the RFQ will have to be submitted by each member of the consortium duly signed by an authorised official of the member. The RFQ should be duly filled in and accompanied by the following details:

In case of a sole bidder

·                    The Audited Balance Sheet and Profit & Loss Account of the sole bidder for the last 3 financial years

·                    Write-up on:

a.       Profile of the sole bidder

b.      A statement of reasons for strategic interest in HPCL

c.       Any other information considered material

In case of a consortium bid

·                    The audited Balance Sheet and the Profit & Loss Account for the last 3 financial years of the lead bidder and other members associated in the bid.

·                    Write-up on:

a.       Lead bidder

i.                     Profile of the lead bidder

ii.                   A statement of reasons for strategic interest in HPCL

iii.                  Any other information considered material by the lead bidder

b.      Other members

i.                     Profile of other members in the consortium

ii.                   Any other information considered material

 

7                    Any change by way of withdrawal/substitution of any member of the consortium or any change affecting the composition of the consortium may be permitted up to the stage of submission of financial bid. GOI / AYCL have the sole discretion to determine the impact of the change in membership on the quality of the consortium and reject a proposal for such reason.

8                    The EOI package must be in English.  Submission of the EOI by fax , e-mail or any other electronic means will not be acceptable.  The EOI and RFQ duly completed along with the details should be submitted not later than 17.30 Hrs. (IST) on March 27, 2002 in a sealed envelope superscribed “Private and Confidential – Expression of Interest for HPCL” at the following address:

 

 

 

A. F. Ferguson & Co.

Apeejay House

B Block, 2^nd Floor

15 Park Street , Kolkata – 700 016

Tel : 0091 – 33 -2296133

Fax : 0091 - 33 - 2261097

 

2.5    Disqualifications

9          Without prejudice, a bidder / consortium may be disqualified and its EOI dropped from further consideration for any of the reasons listed below:

·                    Material misrepresentation by such bidder / member of consortium in the EOI and/or RFQ or otherwise.

·                    Failure by such bidder / consortium to provide the information required to be provided in the EOI and RFQ, and

·                    Submission of EOI and RFQ in respect of any bidder / consortium, where such bidder or consortium member had already submitted an EOI or is a member of a consortium, which has already submitted an EOI.

10        If any information becomes known after the interested party has been qualified to receive the information memorandum which would have entitled Government of India/AYCL to reject or disqualify the relevant company / consortium, GOI / AYCL reserves the right to reject the interested party at the time or at any time after such information becomes known to GOI or AYCL.  GOI shall not consider for the purpose of qualification, an EOI, which has been found to be incomplete in content or attachments or authenticity.

11        Further, Government of India has issued guidelines for disqualification of bidders seeking to acquire any public sector enterprises through the process of disinvestment vide Department of Disinvestment OM No.6 / 4 / 2001-DD-II dated 13th July 2001, a copy of which is enclosed as Annexure-V.  The interested party(ies) are required to read the guidelines and satisfy themselves that they are qualified to bid for the stake in HPCL through the process of disinvestment and give an undertaking to the effect that they are qualified to bid for the stake in HPCL in the Expression of Interest to be submitted by them.  Further, interested parties would be required to provide the information on the criteria, laid down in the guidelines of 13.7.2001 along with their Expressions of Interest (EOI).  The bidders shall be required to provide with their EOI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government.  For other criteria also, a similar undertaking shall be provided along with EOI.

12        Where the interested party is a consortium, GOI may disqualify the entire consortium for any of the reasons specified above, even if it applied to only one member of the consortium.

13        The companies/consortia not satisfying the eligibility and requisite qualification criteria specified in the above sections are not eligible.

14        The EOI submitted by interested parties shall be evaluated on the basis of the criteria specified elsewhere in this document.  If at any time during the evaluation process, GOI requires any clarification, it reserves the right to request such information from any or all of the companies/consortia and the companies/consortia will be obliged to provide the same within reasonable time frame.

15        This document constitutes no form of commitment on the part of the GOI, AYCL  or AFF other than to provide further information on HPCL. Furthermore, this document confers neither the right nor an expectation on any party to participate in the proposed divestment process. The GOI, AYCL and AFF reserve the right to withdraw from the process or any part thereof or vary any terms at any time without assigning any reasons. The GOI and AYCL reserves the right to accept or reject any /all offer(s) without assigning any reasons.

2.6    Future Process

16        Based on an evaluation of EOIs received, interested parties, which are deemed fit (“qualified interested parties” “QIP”), will be qualified to participate in the subsequent selection process (without conferring any right or expectation whatsoever to QIP).  QIP will be provided with the Confidential Information Memorandum (CIM) and shall be invited to participate further in the process described in detail in the CIM.  QIP will get an opportunity to take up site visits and will also hold discussions with the management of HPCL/ AYCL/ officials of Ministry of Heavy Industries & Public Enterprises , Government of India.  QIPs will be invited to submit their proposal and a binding price bid.

2.7    Enquiries

17        GOI, AYCL, HPCL and AFF reserve the right not to respond to questions raised or provide clarifications sought, in their sole discretion, if it is considered that it would be inappropriate to do so. Nothing in this document shall be taken or read as compelling or requiring GOI, AYCL, HPCL and AFF to respond to any question or to provide any clarification. No extension of any time and date referred to in this PIM shall be granted on the basis or grounds that GOI, AYCL, HPCL and AFF have not responded to any question/ provided any clarification.

2.8    Governing Laws/Jurisdiction

18        The laws of Union of India shall govern all matters relating to disinvestment of equity and the bidding procedure. Only Courts at Kolkata (with exclusion of all other Courts) shall have the jurisdiction to decide or adjudicate on any matter, which may arise out of or in connection with the disinvestment process and the bidding procedure . 

 

3.         Brief profile of HPCL

3.1    Introduction

1          HPCL is a public limited company incorporated on 3rd January 1922 in the State of West Bengal. AYCL holds the entire equity share capital of HPCL of Rs. 102.71 lakhs.

2          HPCL has an expertise of 77 years in the printing business and a reputation for quality prints in the eastern region. It initially catered to the in-house requirements of the Andrew Yule group. From 1971, it started carrying out jobs for outside customers as well.

3          HPCL has been promoted to category “B” printer in 1999, after adding a 4 colour offset machine.

4          HPCL’s registered office is located at Kolkata.

 

3.2    Key strengths of HPCL

5          Key strengths of HPCL include:

Ø      Established player in the printing business for last 77 years.

Ø      Reputed for quality prints in the eastern region. 

Ø      Capability of executing high quality precision jobs.

Ø      Recently modernised its printing facilities

Ø      Profit making company

3.3    Main Business activities

6          The main business activity of HPCL is printing. The primary products handled by HPCL are given below:

Category                                                         Types of jobs

Multi-colour                                                     Posters, Pamphlets, Catalogues, Calendars etc.

Bi-colour                                                          Booklets, Brochures, Annual Reports etc.

Single Colour                                                    Books, Periodicals, Handbills etc.

 

Product Mix details (in Rs. Lakhs):

Product Profile                       1998-99                       1999-2000                   2000-01

1. Multi-Colour                        117.95(52%)               170.00(56%)               183.00(55%)

2. Bi-colour                              27.22(12%)                 48.00(16%)                 53(16%)

3. Single-Colour                       81.65(36%)                 87.00(28%)                 96.00(29%)

 

3.4    Production Facilities

7          HPCL’s press is located at a prime location on Chowringhee Road in Kolkata. The premise has an area of 9500 sq. ft. on lease for a period of 30 years from 1998.

8          The company had taken up a programme for modernization of the Press in 1999 by induction of one Delta -664 four colour offset printing machine (size 19” * 25”).The company also possesses two-2 colour HMT offset machines Model SOM-236 purchased in 1990 and 1993

3.5    Client Profile

9          HPCL’s existing clientele includes Central Government departments, State Government departments, District Boards, PSUs and Private Sector companies. HPCL’s clients include, among others the Andrew Yule Group companies, NALCO, Braithwaite, Industrial Bank, Assam Tea, Allahabad Bank, UBI, CMDA, WBSEB, National Library , Ministry of Health etc.

3.6    Employee Strength

10        The employee strength was 76 persons as on 31.01.2002. Six workmen have left earlier in the last VRS scheme implemented by the company.

 

4.   Financial Information Of HPCL

4.1    Equity Base

1          HPCL’s equity base comprises of authorized capital of Rs. 105 lakhs divided into 10,50,000 equity shares of Rs. 10/- each. The issued and subscribed capital of the company as on March 31, 2001 is Rs. 102.71 lakhs divided into 10,27,128 shares of Rs. 10/- each.

2          The AYCL  holds 100% of the equity capital in HPCL.

4.2    Balance Sheet

3          The Balance Sheet of HPCL for the last three years has been presented in Exhibit A

Exhibit A - Balance Sheet (Rs. in lakhs)

 

Particulars	2000-2001	1999-2000	1998-99
Sources of Funds
Share Capital	102.71102.71	102.71102.71	102.71102.71
Reserves and Surplus	0.400.40	0.400.40	0.400.40
Shareholder's Funds	103.11103.11	103.11103.11	103.11103.11
Secured Loans	49.2749.27	78.6278.62	68.0268.02
Unsecured Loans	4.114.11	8.198.19	--
Loan Funds	53.38156.49	86.81189.92	68.02171.13
Total Sources of Funds	156.49	189.92	171.13
Application of Funds	165.20	164.09	161.55
Gross Block	165.20100.42	164.0988.91	161.5575.64
Less: Depreciation	(100.42)64.78	(88.91)75.18	(75.64)85.91
Net Block	64.780.03	75.180.03	85.910.03
Investments	0.03162.44	0.03174.45	0.03139.30
Current Assets, Loans & advances	0.31	7.31	0.30
Inventories	12.4513.47	16.159.47	6.786.54
Sundry Debtors	162.44188.67	174.45207.38	139.30152.92
Cash and Bank Balances	0.31109.05	7.31108.26	0.3082.33
Other current assets-interest receivable	0.18	0.67	0.10
Loans and Advances	13.2979.62	8.8099.12	6.44 70.59
Less: Current Liabilities & Provisions	4.91	6.05	1.07
Current Liabilities	76.437.15	81.759.54	75.9013.53
Provisions	32.62	26.51	6.43
Net Current Assets	79.62	99.12	70.59
Deferred Revenue Expenses	4.91	6.05	1.07
Profit and Loss account	7.15	9.54	13.53
Total Application of Funds	156.49	189.92	171.13

 

Source: Annual Report of Hooghly Printing Company Limited

4.3     Profit and Loss Statement             

4          The Profit and Loss Statement for the last three years has been presented in Exhibit B

Exhibit B: Profit and Loss Statement (Rs. in lakhs)

 

Particulars	2001-02 Apr-Dec (Provisional)	2000-2001	1999-00	1998-99
Income
Sales	599.79	332.26	304.87	226.82
Movement in Stock	2.20	(3.72)	9.00	0.87
Miscellaneous Receipts	0.70	2.78	2.15	1.58
Liabilities written back	--	4.76	2.08	0.01
Interest	0.10	0.22	0.58	0.32
Profit on sale of fixed assets	--	--	--	5.83
Provisions written back	--	--	0.18	--
Total          (A)	602.79	336.30	318.86	235.43
Expenditure
Works Expenses	371.50	168.27	157.62	120.22
Employee Remuneration	110.02	111.65	104.47	83.61
Rent, Rates and Taxes	5.69	4.40	3.80	4.05
Insurance	1.40	0.70	0.68	0.47
Misc. Expenses	61.20	22.35	18.79	11.70
Auditors Remuneration	0.15	0.10	0.10	0.10
Provisions	2.00	0.05	0.15	0.26
Deferred Revenue Expenditure	1.14	1.14	1.14	0.27
Previous Years Expenses	2.30	2.19	2.20	0.63
Total         (B)	555.40	310.85	288.95	221.32
PBIDT          (A-B)	47.39	25.45	29.91	14.11
Interest	6.20	11.32	12.12	6.79
PBDT	41.19	14.13	17.79	7.32
Depreciation	7.50	11.51	13.27	5.45
PBT	33.69	2.62	4.52	1.88
Tax for the year	10.00	0.23	0.53	0.20
Profit After Tax	23.69	2.39	3.99	1.68

Source: Annual Report of Hooghly Printing Company Limited

5.         As per provisional estimates, the turnover of the company for the year ending 2001-02 is expected to be in the region of Rs. 690 lakhs with an estimated pre tax profit of Rs. 48 lakhs.

ANNEXURE-I

 

ANDREW YULE & COMPANY LIMITED

 

INVITATION OF “EXPRESSION OF INTEREST”

FOR STRATEGIC SALE OF 100%SHAREHOLDING IN

HOOGHLY PRINTING COMPANY LIMITED BY

ANDREW YULE & COMPANY LIMITED

 

This announcement is neither a prospectus nor an offer or Invitation for sale to the public of securities

 

Hooghly Printing Company Limited (HPCL), established in 1922, is engaged in precision and voluminous multi colour printing with production facilities at Kolkata. Its paid up share capital as on March 31, 2001 was Rs. 102.71 lakhs. HPCL is a profit making company .Its provisional turnover for the year 2001-02 has been estimated at Rs. 690 lakhs with a pre-tax profit of Rs. 48 lakhs.

 

A. F. Ferguson & Co. (AFF) have been retained as Advisors to AYCL in connection with the proposed sale.

 

The Expressions of Interest (EOIs) are invited to acquire 100% of the equity share holding in HPCL.

 

Interested Parties should submit their Expression of Interest (EOI) along with a Request for Qualification (RFQ) in the prescribed formats at the under-mentioned addresses, before 17.30 hours on March 27, 2002

 

Detailed advertisement including prescribed formats for EOI/ RFQ, pre-qualification requirements and more information pertaining to the Company can be accessed at www.divest.nic.in, www.dhi.nic.in, www.andrewyule.com or www.afferguson.com or  obtained from the under-mentioned address.

 

A. F. Ferguson & Co.                                                 

Apeejay House, ‘B’ Block, 2^nd Floor

15, Park Street, Kolkata- 16 

Tel : 0091-33-2296133 / 2261076, Fax : 0091-33-2261097

e-mail : ferguson@cal.vsnl.net.in

 

GOI/AYCL reserve the right to withdraw from the process or any part thereof or vary any terms at any time or accept or reject any / all offer(s) without assigning any reasons whatsoever. GOI/AYCL/ AFF shall not be responsible for non- receipt of correspondence sent by post/ courier/ e-mail-fax.

 

 

 

ANNEXURE-1I

 

EXPRESSION OF INTEREST

 

(To be forwarded on the letterhead of the interested party(ies)/lead

bidder/member(s) of the consortium submitting the EOI)

 

Reference No.______________                                                        Date ___________

 

A. F. Ferguson & Co.

Apeejay House

Block- B, 2^nd Floor

15 Park Street ,

Kolkata – 700 016

 

EXPRESSION OF INTEREST FOR STRATEGIC BUYER IN HPCL

 

Madam,

 

This is with reference to the advertisement dated ________ inviting Expression of Interest for Hooghly Printing Co. Ltd (HPCL). 

 

As specified in the advertisement, the Preliminary Information Memorandum (PIM) was made available to us.

 

We have read and understood the contents of PIM and are desirous of participating in the above disinvestment process, and for this purpose:

 

We propose to submit our EOI in individual capacity as __________________

 

OR

 

We have formed/propose to form a consortium comprising of ____members as follows:

1.         ____________________________

2.         ____________________________

3.         ____________________________

 

We believe that we/our consortium/proposed consortium satisfies the eligibility criteria set out in relevant sections of the PIM including the guidelines for qualification of bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment issued by the Government of India vide Department of Disinvestment OM No.6/4/2001-DD-II dated 13^th July 2001 and subsequent amendments/ clarifications thereto. 

 

 

 

We certify that in regard to matters other than security and integrity of the country, we have not been convicted by a Court of law or indicted or received any adverse orders passed by a regulatory authority which would cast a doubt on our ability to manage the unit when it is disinvested or which relates to a grave offence.

 

We further certify that in regard to matters relating to security and integrity of the country we have not been convicted by a court of Law for any offence committed by us or by any of our sister concerns and no charge sheet has been filed by any agency of the Government for any offence committed by us or by any of our sister concerns.

 

We further certify that no investigation by a regulatory authority is pending either against us or against our sister concerns or against our CEO or any of our Directors/Managers/employees.

 

We undertake that in case due to any change in facts or circumstances during the pendency of the disinvestment process, we are attracted by the provisions of disqualification in terms of the subject guidelines, we would intimate AYCL or AFF immediately.

 

The Statement of Legal Capacity and Request for Qualification as per formats indicated duly signed by us/respective members, who jointly satisfy the eligibility criteria, are enclosed.

 

We shall be glad to receive further communication on the subject.

 

Yours faithfully,

 

 

Authorized Signatory

                                          For and on behalf of

 

Enclosure: Statement of Legal Capacity and Request for Qualification

 

 

ANNEXURE-III

 

STATEMENT OF LEGAL CAPACITY

 

(To be forwarded on the letterhead of the interested party / each member of the consortium submitting the EOI).

 

Reference No.______________                                                        Date ___________

 

A. F. Ferguson & Co.

Apeejay House

B Block, 2^nd Floor

15 Park Street , Kolkata – 700 016

 

EXPRESSION OF INTEREST FOR STRATEGIC INVESTMENT IN HPCL

 

Sir,

 

This is with reference to the advertisement dated ________ inviting Expression of Interest for Hooghly Printing Company Limited (HPCL).

 

We have read and understood the contents of the PIM and the advertisement and pursuant to this hereby confirm that:

 

We satisfy the eligibility criteria laid out in the PIM and the advertisement.

 

We are a member of the consortium (constitution of which has been described in the Expression of Interest) which jointly satisfies the eligibility criteria as detailed in the PIM.*

 

We have agreed that ________(insert member’s name) will act as the lead member of our consortium.*

 

We have agreed that ______________(insert individual’s name) will act as our representative and has been duly authorized to submit the EOI on our behalf. Further, the authorized signatory is vested with requisite powers to furnish such letter and Request for Qualification and authenticate the same.*

 

 

Yours faithfully,

 

Authorised Signatory

For and on behalf of (party/member)

*Strike off whichever clause is not applicable

ANNEXURE-IV

 

REQUEST FOR QUALIFICATION

 

(To be submitted in respect of each member of the consortium)

 

Name of the interested Party(ies)/Member(s) ___________________________

Constitution (Tick, wherever applicable)         Sector (Tick, wherever applicable)

 

Public Limited Company  __	-          Public Sector  __
Private Limited Company  __	-           Joint Sector  __
Others, If any  __

-           If others, please specify                         :

-           Nature of business/products dealt with :

-           Date of incorporation                                        :

-           Date of commencement of business                   :

-           Full address including phone No./fax No.          :

-           Registered Office                                              :

-           Head Office                                                      :

-           Address for correspondence                             :

 

Basis of eligibility for participation in process for induction of Strategic Buyer (Please mention details of your eligibility)

 

Please attach supporting documents e.g. Certified Provisional/Audited Statement of Accounts/Annual Report.

 

Contact Person(s)

Name:

Designation:

Phone No.:

Mobile No.:

Fax No.:

Email.:

 

Yours faithfully,

 

 

Authorised Signatory

For and on behalf of

Place :

Date :

 

^/2001-DD-I

ANNEXURE-V

 

No. 6 / 4 / 2001-DD-II

Government of India

Department of Disinvestment

Block 14, CGO Complex

New Delhi.

Dated 13^th July, 2001.

 

OFFICE MEMORANDUM

 

Sub:     Guidelines for qualification of Bidders seeking to acquire stakes in Public Sector Enterprises through the process of disinvestment

 

Government has examined the issue of framing comprehensive and transparent guidelines defining the criteria for bidders interested in PSE-disinvestment so that the parties selected through competitive bidding could inspire public confidence.  Earlier, criteria like net worth, experience etc. used to be prescribed.  Based on experience and in consultation with concerned departments, Government has decided to prescribe the following additional criteria for the qualification / disqualification of the parties seeking to acquire stakes in public sector enterprises through disinvestment:

 

(a)                In regard to matters other than the security and integrity of the country, any conviction by a Court of Law or indictment / adverse order by a regulatory authority that casts a doubt on the ability of the bidder to manage the public sector unit when it is disinvested, or which relates to a grave offence would constitute disqualification.  Grave offence is defined to be of such a nature that it outrages the moral sense of the community.  The decision in regard to the nature of the offence would be taken on case to case basis after considering the facts of the case and relevant legal principles, by the Government.

 

(b)               In regard to matters relating to the security and integrity of the country, any charge-sheet by an agency of the Government / conviction by a Court of Law for an offence committed by the bidding party or by any sister concern of the bidding party would result in disqualification.  The decision in regard to the relationship between the sister concerns would be taken, based on the relevant facts and after examining whether the two concerns are substantially controlled by the same person/persons.

 

(c)                In both (a) and (b), disqualification shall continue for a period that Government deems appropriate.

 

(d)               Any entity, which is disqualified from participating in the disinvestment process, would not be allowed to remain associated with it or get associated merely because it has preferred an appeal against the order based on which it has been disqualified.  The mere pendency of appeal will have no effect on the disqualification.

 

(e)                The disqualification criteria would come into effect immediately and would apply to all bidders for various disinvestment transactions, which have not been completed as yet.

 

(f)                 Before disqualifying a concern, a Show Cause Notice why it should not be disqualified would be issued to it and it would be given an opportunity to explain its position.

 

(g)                Henceforth, these criteria will be prescribed in the advertisements seeking Expression of Interest (EOI) from the interested parties. The interested parties would be required to provide the information on the above criteria, along with their Expressions of Interest (EOI).  The bidders shall be required to provide with their EOI an undertaking to the effect that no investigation by a regulatory authority is pending against them.  In case any investigation is pending against the concern or its sister concern or against its CEO or any of its Directors/Managers/employees, full details of such investigation including the name of the investigating agency, the charge/offence for which the investigation has been launched, name and designation of persons against whom the investigation has been launched and other relevant information should be disclosed, to the satisfaction of the Government.  For other criteria also, a similar undertaking shall be obtained along with EOI.

 

-sd/-

(A.K. Tewari)

Under Secretary to the Government of India.

 

 

To

As per list attached.

 

CLARIFICATION

 

Note : Vide clarification dated : 10.1.2002 to the above guidelines it has been provided that the following offence be treated as a grave offence:

 

(1)               Orders of Securities and Exchange Board of India which directly relates to “fraud” as defined in the Securities and Exchange Board of India Act, 1992 and/or regulations made thereunder;

(2)               Orders of Securities and Exchange Board of India which cast a doubt on the ability of the Strategic Partner to manage the Company after the sale of the Transaction Shares by the Government to the Strategic Partner;

(3)               Any conviction by a Court of Law;

(4)               In cases in which Securities and Exchange Board of India also passes a prosecution order, disqualification of the Strategic Partner should arise only on conviction by the Court of Law.