Modi Govt selling profit making PSUs as peanuts: Congress questions Pawan Hans divestment
The bidder, Star9 Mobility, set up only 6 months ago, is a consortium of three entities, one of which-- Almas Global Opportunity Fund-- is set up under jurisdiction of Cayman Islands, a tax haven
The Congress on Sunday raised questions over the deal to sale Centre's 51% stake in helicopter services provider Pawan Hans Ltd (PHL), asking as to why the profit-making company suddenly started running into losses and why the Modi government is selling it to a consortium with questionable credentials.
Congress spokesman Gourav Vallabh demanded to know as to why the government did not explore merging the firm with ONGC --that already has 49% stake in Pawan Hans-- instead of deciding to hand it over to a consortium that is just six-months-old.
He pointed out that Pawan Hans employee union expressed interest in participating in the disinvestment process and had also recommended that Pawan Hans be merged with ONGC or made a subsidiary company but the government "brushed it off".
The Finance Ministry on Friday said Star9 Mobility Pvt Ltd will buy the government's 51% stake in helicopter services provider Pawan Hans Ltd (PHL), along with the transfer of management control, for Rs 211.14 crore.
The reserve price for the strategic sale, which comes after three unsuccessful attempts, was fixed at Rs 199.92 crore based on the valuation carried out by the transaction adviser and asset valuer.
Attacking the government over the decision, Congress spokesperson Gourav Vallabh said that in the series of miscalculated and injudicious disinvestment decisions to justify their financial policies, "they are committing a series of blunders".
The reserve price for the sale of this 51% majority stake was fixed at Rs 199.92 crores and the other two bidders that participated made bids of Rs 181.05 crore and Rs 153.15 crore respectively, Vallabh pointed out.
Vallabh said while this may seem like a normal disinvestment, there are several things that raise eyebrows such as the the Star9 Mobility Private Ltd, a consortium of Big Charter Private Limited, Maharaja Aviation Private Limited and Almas Global Opportunity Fund SPC, set-up just six months ago on October 29, 2021.
Star9 Mobility Private Ltd doesn't have any helicopters of its own while Big Charter Private Limited has just three helicopters in its fleet, he said.
Also, Almas Global Opportunity Fund SPC is set up under the jurisdiction of Cayman Islands and has no experience in this sector, he said.
Vallabh also claimed that there is a court case ongoing between Big Charter Private Limited and Ezen Aviation Private Limited in the Delhi High court
"Pawan Hans made a net profit of Rs. 242.78 crore in 2016-17 but has gone downhill since 2018-19 making losses of Rs 63.67 crores in 2018-19 and Rs 33.15 crores in 2019-20," he said.
Posing questions for the Modi Government over the decision, Vallabh said that with details available about the bidders and their consortium there are red flags, and how did the government agree to such a deal.
"There were three bidders that participated in the disinvestment process but only one bidder bid over the reserve price. What was the government's reason to go ahead with just one proper bid?" Vallabh said.
Did the government explore merging Pawan Hans with ONGC, keeping in mind they already have 49% stake and Pawan Hans playing a very strategic role with ONGC, HAL etc., he asked.
Pointing out that a company that has been consistently making net profits suddenly starts making losses since 2018-19 around the same time when the disinvestment was first processed, Vallabh asked is this again an attempt to lower the valuation to ease sale to someone who would benefit.
Vallabh pointed out that Pawan Hans is South-East Asia's largest helicopter company with a fleet of 42 Helicopters.
Off shore operations, connecting inaccessible areas, charter services, search and rescue work, VIP transportation, corporate and special charter flights, hotline washing of insulators and Heli-pilgrims such to Kedarnath, Badrinath, Amartnath, Maa Vaishno Devi, are some of its major services
The PHL is a 51:49 joint venture of the government and ONGC. ONGC had earlier decided to offer its entire shareholding to the successful bidder identified in the government strategic disinvestment transaction, on the same price and terms as the government.
The government in December last year received three financial bids for buying the company.
Vallabh accused the BJP of inept handling of the economy and said after eight years of disastrous financial management, the economy is reeling.
The BJP government has forced sectors to the end of their tethers that needed support and have magically made good companies and sectors struggle, he alleged.
They are violating all prudence and common logic to find a way out of the financial mismanagement caused in the last 8 years, Vallabh said.
Pawan Hans has been incurring losses in the last three years (FY-19, FY-20 and FY-21). It has a fleet of 42 helicopters of which 41 are owned by the company.
The owned helicopters have an average age of over 20 years and three-fourths of them are presently not being manufactured by the original equipment manufacturer.
(With PTI inputs)