In order to ensure that the ownership
and effective management control of Air India stays with an Indian entity, the
government is likely to scan the credentials of bidders for Air
The move is aimed at addressing concerns
over day-to-day management of some of the private carriers with foreign
airlines as partners where shareholders were not really with the Indian owners
despite the government rules mandating so.
This comes while last week, the union
cabinet liberalised and simplified the Foreign Direct Investment (FDI) regime,
allowing foreign airlines to invest up to 49 percent in Air India, and opening
up 100 percent FDI in single-brand retail under the automatic route.
As per media reports, the government and
its advisers for the stake sale are expected to pour over the shareholders'
agreement and other details to ensure that the board and key management
personnel are appointed by the Indian partner.
Meanwhile, the government now reportedly
wants to split the company into four different verticals for its sale in
December this year. This is against its earlier stance of not selling the
entities of India's national carrier Air India separately.
Union minister Jayant Sinha has said Air
India and its subsidiary Air India Express will be sold as one company, and the
government will assume non-core debt. The government will also take into consideration
the non-core assets of the company, he assured.