While Tata and Spicejet continue in the bidding process for Air India, the consortium of Air India employees that placed an expression of interest (EoI) has failed to qualify for the next round.
The government aims to complete the privatisation of the national carrier in the next fiscal.
The news of disqualification was given by Meenakshi Mallik, the airline’s commercial director, to Air India employees.
Mallik spearheaded the ambitious attempt to take over the state-run carrier. As per the news report, Mallik informed the employees in a three-page letter that the consortium was out of the race.
“As of late last night, I have seen an email from the transaction adviser to the government of India (Ernst & Young LLP), informing the Employees of Air India that we have been unsuccessful in qualifying to the next phase of the ‘Disinvestment Acquisition process’," she said.
The three reasons for the bid not going through were: non-submission of required three years audited financial statements for foreign consortium member, non-submission of information or details by interested bidders for investments in offshore companies, which forms a substantial part of the net worth of the foreign consortium member, and the foreign consortium member not being an appropriately regulated foreign investment fund as defined in the preliminary information memorandum.
In January, Air India’s pilot unions IPG and ICPA urged the airline to replace Mallik, alleging that her continuation on the post amounts to ‘conflict of interest’ as she has submitted a bid for the company as head of the employee consortium. Replying to the allegation, Mallik said she has already been rescued from the board meet on disinvestment, and is involved only in the day-to-day functioning of the airline.
Meanwhile, Mallik, commenting on the disqualification, highlighted that it was upsetting to disqualify, but that the government had no objection or reservation whatsoever with any of the documentation furnished on behalf of the employees, which was reassuring.
Mallik added that while it is flattering to note that many wanted to associate themselves with the consortium, it partnered with a financial fund based out of the Republic of Seychelles and dealt exclusively with it through the disinvestment process.