A Seychelles-based financial partner has proven to be the weak link in the bid made by a group of Air India employees for the divestment of the national carrier.
The transaction advisor to the government, Ernst & Young, informed the employees of Air India that they have been unsuccessful in qualifying for the next phase of the ‘disinvestment acquisition process' on account of inadequate details of the Seychelles-based fund.
The Seychelles-based fund did not give proper financial statements, and is not even a properly regulated foreign regulated fund.
In a mail to Meenakshi Malik, an Air India board member who led the bid, the transaction advisor said, "The EOI and the supporting documents submitted by you have been duly evaluated and have been found to not fulfil the eligibility requirements set out in the Preliminary Information Memorandum (as amended) issued in respect of the strategic disinvestment of Air India Limited and is liable for disqualification, including on account of: (A) non-submission of required three years audited financial statements for foreign consortium member; (B) non-submission of information or details by IB for investments in offshore companies, which form substantial part of the net worth of foreign consortium member; and (C) the foreign consortium member not being an appropriately regulated foreign investment fund as defined in the PIM. Accordingly, we hereby inform you that, you have been disqualified from proceeding to Stage II of the strategic disinvestment of AI."
Malik told the other employees in a mail, "The employees were in fact so formidable a unit that many outsiders and funds unconnected to us made tall claims of supporting and partnering with the employees of Air India. I have been made aware of one such US-based fund which went so far as to represent itself as being the financial partner of the employees of Air India, despite having no such arrangement with the employees.
"While it is flattering to note that many wanted to associate themselves with us, we were in fact partnered with a financial fund based out of the Republic of Seychelles and dealt exclusively with them through the disinvestment process. I accordingly, also expressed, on behalf of the employees, my sincerest thanks to our financial partner for having believed in us and agreeing to invest in us."