New Delhi: The Centre on Monday, July 3, decided to call off the strategic disinvestment of Pawan Hans as the successful bidding consortium Star9 Mobility Pvt Ltd was disqualified in view of pending legal cases, PTI reported.

Pawan Hans is a 51:49 joint venture of the government and ONGC. The largest helicopter service provider in the country was founded in 1985 as a joint venture of the Ministry of Civil Aviation and the public sector Oil and Natural Gas Corporation (ONGC).

In April 2022, the government had decided to sell Pawan Hans to Star9 Mobility Pvt Ltd for Rs 211.14 crore. Star9 Mobility is a consortium of Big Charter Private Ltd, Maharaja Aviation Private Ltd and Almas Global Opportunity Fund SPC.

In May this year, the sale process was halted after it emerged that the lead member of the winning bidder consortium – Almas Global Opportunity Fund SPC – has a case pending against it at the National Company Law Tribunal (NCLT).

In a statement issued on Monday, July 3, the Department of Investment and Public Asset Management (DIPAM) said Star 9 Mobility Pvt Ltd is "disqualified" from the process of strategic disinvestment of Pawan Hans Ltd.

“After careful consideration of the response of the successful bidder to the show cause notice, with the approval of alternative mechanism …the government has decided that successful bidding consortium M/s Star 9 Mobility Pvt Ltd is disqualified from the process of strategic disinvestment of Pawan Hans Ltd… Further, the current EoI process for strategic disinvestment stands annulled,” the statement said.

In the past three years, Pawan Hans has been registering losses. In FY18-19, it recorded its worst loss of around Rs 70 crore, which has improved to losses of around Rs 18.5 crore in FY19-20 and around Rs 17.6 crore in FY20-21. This came after a sharp profit that it registered in FY16-17 of Rs 254 crore.

Following this, on April 29, 2022, the Cabinet Committee on Economic Affairs approved Star9 Mobility Private Limited’s bid to buy the government’s 51% stake in Pawan Hans Limited for Rs 211 crore.

In just over two weeks, several questions emerged regarding the privatisation of this iconic public sector, and questions were also raised about the identity of its new owner.

The Wire had published a piece by independent journalists, Ravi Nair, Abir Dasgupta and Paranjoy Guha Thakurta, on May 16, 2022, which said, "Our investigation shows that this ‘transparent’ decision based on a 'multi-layered consultation' has resulted in the purchase 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. 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 has fully met the eligibility criteria laid down by the government for bidders."

This is not the first time the Narendra Modi government’s sale of government assets to private companies has raised questions about the new owners. In January 2022, the government put on hold the letter of intent for privatisation of Central Electronics Ltd (CEL) after doubts were raised about the winning bidder’s financial track record, the cases pending against it in the NCLT and questionable inter-connections among bidders.

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