Air India was facing daily losses of ₹20 cr; had to sell: Centre tells Delhi HC
Premium- There were losses of approximately ₹20 crore everyday and it could not allow wastage of more public money, the Union of India lawyer said
Air India was in continuous losses and the Centre couldn't afford further losses, the Union of India informed the Delhi High Court on Tuesday. There were losses of approximately ₹20 crore everyday and it could not allow wastage of more public money, the Union of India lawyer stated.
The submission of Solicitor General of India Tushar Mehta came today during the hearing of a plea moved by BJP leader Subramanian Swamy in the Delhi HC that sought to quash/set aside the Air India disinvestment process.
Mehta argued that the successful bidder Talace Private Limited was fully owned by Tata Sons and unrelated to Air Asia. He further said that the disinvestment is a policy decision and the decision was taken in 2017 due to the heavy continuous losses.
A bench of Chief Justice DN Patel and Justice Jyoti Singh heard the arguments put forward by Swamy, SG Mehta and senior advocate Harish Salve, who appeared in the matter on behalf of AirAsia, and said it will pass an order on the petition on January 6.
It also asked the counsel for the Centre and the other respondents to file a short note during the day and granted liberty to Swamy to file a short note by Wednesday.
The court further asked the petitioner to file legible copies of certain documents annexed with the petition.
Swamy, through advocate Satya Sabarwal, has also sought a CBI probe into the role and the functioning of the authorities, and the submission of a detailed report before the court.
In October 2020, the government accepted the highest bid made by a Tata Sons company for 100 per cent equity shares of Air India and Air India Express, along with the government's 50 per cent stake in ground-handling company AISATS -- the first privatisation in 20 years.
The solicitor general contended that the petition was founded on three misconceptions and it does not need any consideration.
Salve also contended that there was nothing in the petition and that the bids were complete, the share agreements signed and all this has been in public domain for quite some time.
On October 25 last year, the Centre signed the share purchase agreement with Tata Sons for the sale of national carrier Air India for ₹18,000 crore. The Tatas would pay ₹2,700 crore in cash and take over the airline's debt of ₹13,500 crore.
The Tatas beat the ₹15,100 crore offer from a consortium led by Spicejet promoter Ajay Singh and the reserve price of ₹12,906 crore set by the government for the sale of its 100 per cent stake in the loss-making carrier.
The Centre earlier informed that the winning bidder--Tata Sons--will retain all employees for one year and the group will need to offer a voluntary retirement scheme if it decides on retrenchment after the period.
The Centre has said that the interest of the employees and retired employees would be taken care of in the disinvestment process.
As of August 31 last year, Air India had a total debt of ₹61,562 crore, of which 75 per cent or ₹46,262 crore will be transferred to a special purpose vehicle, Air India Assets Holding Limited (AIAHL), before handing over the airline to the Tata group.
With agency inputs
Never miss a story! Stay connected and informed with Mint. Download our App Now!!