Unwinding the Pawan Hans knot

A series of irregularities have surfaced over the ongoing privatisation process of Pawan Hans, thus putting everything into a deep quagmire. An in-depth report.

The Indian government's Cabinet Committee on Economic Affairs (CCEA) approved Star9 Mobility Private Limited's bid to buy the government's 51 percent stake in public sector helicopter service provider Pawan Hans Limited for Rs 211 crore on April 29. A couple weeks later, several questions about the privatisation of the PSU still remain unanswered and there are unsolved doubts about the identity of its new owner.

Star9 Mobility is a consortium of three different entities- Maharaja Aviation Private Limited, which owns 25 percent, Big Charter Private Limited (with 26 percent stake) and Almas Global Opportunity Fund with the remaining 49 percent. The consortium will also acquire the remaining 49 percent of Pawan Hans, which belongs to the public sector energy giant ONGC- at the same price per share.

As per the Ministry of Finance, the strategic disinvestment transaction was implemented through an open, competitive bidding process supported by a multi-layered consultative decision-making mechanism involving an inter-ministerial group, a core group of secretaries on disinvestment and the empowered alternative mechanism.

The acquisition of Pawan Hans by a consortium whose leading stakeholders have placed little or no information in the public domain about themselves and their ability to run such a company raises many doubts. In fact, the largest stakeholder in the consortium has been sanctioned by the National Company Law Tribunal (NCLT) and it is not clear whether it is fully meeting the eligibility criteria laid down by the union government for bidders.