Published on Wed, Mar 25, 2009 at 20:44 , Updated at Thu, Mar 26, 2009 at 11:08
Source : CNBC-TV18
Earlier in the day, there were news reports that BK Modi had said he may pull out of the Satyam bid because it lacked transparency. Hitesh Jain, Partner, ALMT Legal, said Modi can legally challenge the the Satyam board if he felt the bidding process wasn’t transparent and didn’t offer a level-playing field to all bidders even if the request-for-proposal had conditions that the bidders could not legally challenge the Satyam’s board decisions. “He (Modi) can certainly look at the civil courts or the writ petition on the ground that this is a government appointed board and they have not followed the principles of the fair play,” Jain said.
Here is a verbatim transcript of Hitesh Jain’s exclusive interview on CNBC-TV18. Also watch the accompanying video.
Q: We have heard about the short-listed candidates, financial information will be divulged. Earlier today we heard reports from BK Modi, one of the bidders, saying that there is lack of transparency and he doesn’t get the required information, and may not consider bidding. Do you sense perhaps there could be a legal tussle on the cards? Could a bidder like Modi become a spoiler?
A: One thing is very clear. In the bidding process, two things have to be ensured — transparency and level-playing field. If any person who is aggrieved and feels that there has not been any transparency and there are some people who have been favoured, then certainly he can play a spoiler’s action.
It is a two-stage process. First is a technical process. Second is the financial process. If a person is removed or disqualified at the technical process, and he feels that a fair procedure has not be followed, certainly he can end up playing a spoiler.
Q: How can he play spoiler because in the request-for-proposal (RFB) itself it was very clear that Satyam board had said that you cannot challenge its decision — the company that was actually going to participate would have to give up the right to challenge the decisions of the Satyam board. So in that sense how much room does Modi actually have or somebody like Modi actually has to play spoiler?
A: It says that he cannot challenge but if a level-playing field, which has not been given, he certainly can challenge. This is a government-controlled and appointed board. So if it is a government-appointed board, then certainly principles of natural justice comes into the actions straight-away if a person is disqualified. He can either adopt the procedure of writ petition or he can go to the Company Law Board and can challenge the decision there. But it will be very difficult if he is not an existing shareholder because of lack of locus standi.
However, he can certainly look at the civil courts or the writ petition on the ground that this is a government appointed board and they have not followed the principles of the fair play. So in spite of the fact there are the rules framed to the effect that he cannot challenge, he can still challenge on the ground assuming let us look at the scenario: if some person is justified and if he is ousted for no reason then certainly nothing precludes the court from looking into it and nothing precludes the person from bringing in the action. He will not, according to me, be violating any terms of conditions of the bidding process.
Q: From now to the next stage, the shortlist should be out and we are still awaiting the names of those companies that have been short-listed, both through the technical and financial bids, the question is from now to the next stage where they will go into a closed room, any concerns legally that can crop up?
A: Concerns that can crop up depend upon what are the terms and conditions on which you are going to qualify for the technical criteria.
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