IFCI chief quits over ‘dual role’
N Balasubramanian resigned from the board following a controversy about his alleged ‘dual role’ both as the company’s chairman and an advisor to one of the bidders.india Updated: Sep 16, 2007 03:01 IST
Hours before the bids for a 26 per cent stake in IFCI were opened on Saturday, its chairman N. Balasubramanian resigned from the board following a controversy about his alleged ‘dual role’ both as the company’s chairman and an advisor to one of the bidders, sources in the lending institution said.
The HT reported on Saturday about the inconsistencies of Balasubramanian’s position in the bidding process as he was an advisor to Standard Chartered Bank, which is a member of a consortium that has bid for a stake in the country’s oldest institutional lending major.
Eleven parties have submitted bids for a 26 per cent stake in IFCI. Metal czar Anil Agarwal’s flagship company, Sterlite, has bid in a consortium with investment banking giant Morgan Stanley.
Another consortium led by WL Ross including Standard Chartered Bank, Goldman Sachs and HDFC Ltd has also submitted its bid. Punjab National Bank (PNB) has partnered with Japan’s Shinsei Bank and the US-based JC Flowers to acquire the strategic stake in IFCI. Besides, Kotak Mahindra Bank, IDFC, GE Capital, New Bridge, Cargill Finance, Netxis and Blackstone Capital Partners have bid individually.
As IFCI has an asset base of around Rs 7,000 crore under the non-performing category but fully provided for, which might have appreciated significantly, experts feel that inherent strength would be significantly higher than the present value. “The acquisition of 26 per cent or 46 per cent, in case the open offer gets fully subscribed, would help some players such as GE Capital to have their pan-India footprint with a groing concern,” corporate sources close to the deal said.
“The process has just begun, we will select the strategic partners which can provide a long-term association. The valuation is an important criterion but subject to the condition of a strategic fit in the whole business,” said IFCI CEO and MD Atul Rai.