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Hindujas withdraw from A-I, IA bid

Without waiting for the government's verdict on qualification of its bids, Hindujas on Friday withdrew from the race for wresting control of both Air-India and Indian Airlines.

"Government is prejudging the issue even without waiting for the law ministry's comments on our reply to show cause the notice issued by Department of Divestment. We have been given unjust treatment whereas we expected a more fair deal," chairman of Hinduja Group's flagship company Ashok Leyland R J Shahaney told PTI in an interview shortly after pulling out from the race.

Consequently, there is no bidder in the race for Indian Airlines while Tata-SIA is the sole bidder for Air-India amidst speculation that Singapore Airlines was unsure of continuing in the race.

Earlier, Hindujas had withdrawn from the race for stake in IBP Company Ltd and Jessop.

Shahaney, who wrote to divestment secretary informing about the AL consortium's decision to withdraw from the race for the two airlines earlier during the day, is understood to have been advised by the Ministry to avoid a formal rejection, sources said.

In his communication, Shahaney said "Divestment Department seems determined to find reasons to disqualify AL consortium, somehow or anyhow and therefore we believe it is not possible for us to be partners with the government in running the airlines,".

Divestment Secretary Pradip Baijal confirmed the receipt of the letters from AL, but declined to comment.

Stating that it had earlier pointed out to DoD that guidelines for qualification of bidders and showcause notices issued thereunder to the group, were bad in law and needed to be withdrawn and cancelled, Hindujas said, "We regret we have not heard anything from you (DoD) in this regard till date."

"However, we believe that divestment minister made a statement last week in the Rajya Sabha that AL consortium, interalia, consists of a Panamanian company (presumably the reference is to MDC, which indeed is a member of AL Consortium) of which S P Hinduja is the chairman (which he is not)," the communication said.

It alleged that the statement was factually incorrect and hence either falsely reported or intentionally made.

"We, therefore, hereby withdraw our bid from the A-I divestment process," it said.

The company has sent an identical letter communicating its withdrawal from IA.

The government is currently in the process of offloading 40 per cent stake in Air-India to a strategic partner.

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