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Strategic sale of CEL put on hold

By IndianMandarins- 13 Jan 2022


New Delhi (13.01.2022): The Union govt put on hold the privatisation of Central Electronics Ltd (CEL) after the employees union approached the Delhi High Court against the ‘so-called’ strategic sale of the company to Nandal Finance & Leasing; a little-known city-based firm which made the highest bid of Rs 210 crore.

The decision is facing allegations of under-valuation. This is the second time that the Centre had initiated the process of strategic sale of CEL, under the Ministry of Science & Technology, after the Cabinet in October 2016, approved its strategic sale. The government had in November 2021 approved the sale of CEL and the transaction was scheduled to be completed by March 2022.

The Congress party made allegations that the valuation of the CEL, using different methods, was between Rs 957 crore and Rs 1,600 crore.

Referring to allegations of under-valuation Tuhin Kant Pandey (IAS:1987:OR) Union Secretary in DIPAM said that "How can a company with a book value of Rs 108 crore have a valuation of Rs 1,000 crore. Some year they (CEL) earned Rs 20 crore profit, in some, they earned Rs 1 crore profit".

He also said that the Letter of Intent (LoI) for sale of 100 percent govt shareholding in CEL to Nandal Finance & Leasing was not issued yet and the inter-ministerial group on disinvestment was examining the allegations.

CEL (incorporated in 1974), is a pioneer in the field of Solar Photovoltaic (SPV) which it had developed the technology with its own R&D efforts. It has also developed axle counter systems that are being used in Railway signaling systems for the safe running of trains.

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