Sources told ET that Fairfax had conveyed to the government its investors were not comfortable providing confidential information about themselves at an early stage in the bidding process.
The company had said if it were to participate in the bid process, the final composition of the bidding consortium would be different, and that a security clearance on the existing firm would not remain relevant, the sources said.
No Clarity on Whether Fairfax Submitted EoI
As per existing security-clearance procedures, the government can verify details about ultimate beneficial ownership of foreign companies that participate in the privatisation process. This could extend to multiple layers of their shareholding structure, including details about the domicile status of those entities. Potential bidders are obliged to provide information if it is sought. The objective is to check for red flags in the backgrounds of the entities.
ET was unable to confirm whether Fairfax finally submitted an EoI. Fairfax did not respond to requests for comment.
There are five EoIs that have been received for IDBI Bank. One of them has a technical flaw and may not be accepted, as per people familiar with the matter.
Two-Stage Screening
IDBI Bank’s bidding process envisions security clearances at two stages. The first stage happens when potential bidders submit EoIs. The second security clearance takes place when the winning bidder is announced.
Fairfax has shown interest in IDBI Bank’s sale process over the past year. The Toronto-based $90-billion investment company had also attended road shows conducted for the sale process.
