Gandhi Backs IDBI Staff as Sale Process Faces Scrutiny

The Finance Ministry says a second bidding round raised IDBI Bank’s sale price by Rs 3,917 crore. At almost the same time, an internal government note said officials set aside an earlier minimum price after Fairfax’s first offer fell short. Congress leader Rahul Gandhi backed employees opposing the sale. The competing accounts have turned a bank sale into a debate over how the government set its price. ^2,4

The note says both first-round bidders refused to match the Rs 94.42-per-share minimum price. Fairfax then submitted a revised offer, ranked first in July, and officials ordered fresh valuations under changed rules. Those valuations came in below Fairfax’s offer; the Cabinet approved the sale at Rs 81 per share in October. The Finance Ministry says the minimum price was neither raised nor lowered. The first round ended after bids were not approved, and the Core Group of Secretaries on Disinvestment had authority to set a process for best offers. ^2,4

That dispute matters because the sale transfers control of a bank built with public money, while the government and Life Insurance Corporation of India will keep smaller stakes. The ministry says independent advisers valued the bank without seeing the bids, and that the second round increased proceeds for the government and LIC. It also says a tax-related promise to Fairfax could cost at most Rs 627 crore, far less than the reported price increase. Gandhi warns private ownership could end reservation for disadvantaged groups and weaken employee protections; an employee forum has called for parliamentary review. ^4,7,14

The Cabinet approved the Rs 52,878 crore deal on October 14, with Fairfax set to buy a 60.72 per cent stake. Gandhi says the government broke a 2003 parliamentary assurance to retain at least 51 per cent, while employees want the transaction paused and examined. The sale is expected to be completed by the end of the fiscal year; the government must defend its process as scrutiny grows. ^3,10,14