The government has decided to call off the strategic disinvestment of Pawan Hans as the successful bidding consortium Star9 Mobility was disqualified because of pending legal cases, the Department of Investment and Public Asset Management (DIPAM) said in a statement on July 3.

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Pawan Hans is a 51:49 joint venture of the government and ONGC.

Last year on April 29, the government had approved the highest bidder Star9 Mobility Pvt Ltd (a consortium of Maharaja Aviation Pvt Ltd, Big Charter Pvt. Ltd and Almas Global Opportunity Fund (‘AGOF’)) for sale of 100 percent equity shareholding of the government in Pawan Hans Limited, following a transparent, open and competitive bidding process and laid-down procedure of strategic disinvestment.

The government had decided to sell the helicopter service provider for Rs 211.14 crore to Star9 Mobility Pvt Ltd.

The sale process was put on hold in May after a case pending against the lead member of the winning bidder consortium — Almas Global Opportunity Fund SPC -- came to the fore. In a statement, the DIPAM said the government has examined the adverse orders of NCLT and NCLAT.

“Subsequently, it became known that NCLT, Kolkata Bench had recently issued an adverse order against AGOF, a member of the successful consortium, in another case relating to a resolution plan under the IBC. Considering the adverse order of NCLT, the Letter of Intent (LoI) was not issued in favor of the successful bidder,” as per the DIPAM statement.

It adds that the concerned consortium member then filed an appeal against the NCLT order in National Company Law Appellate Tribunal (NCLAT) which dismissed the appeal and upheld the original order of NCLT and directed that the NCLT order be forwarded to MCA and IBBI for their consideration on initiation of complaint under sections 74(3) and 236 of Indian Bankruptcy Code, 2016.

“After consideration, Insolvency and Bankruptcy Board of India (IBBI) has filed a complaint against the concerned consortium member in the special court,” it noted.

The government examined the adverse orders of NCLT and NCLAT and took note of the complaint filed by IBBI and considered that the adverse orders against a consortium member would lead to disqualification of the successful bidder, the statement said. It added that due opportunity was provided to the successful bidder to respond to the disqualification through a show cause notice.

"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 DIPAM said.