The PSU boards do not have powers for disinvestment or closure of their subsidiaries in joint ventures.
New Delhi:
The Cupboard on Wednesday empowered boards of state-owned firms to resolve on the closure and divestment of models/subsidiaries.
Presently, the Board of Administrators of holding or father or mother public sector enterprises have been delegated sure powers to make fairness investments to determine monetary joint ventures and wholly-owned subsidiaries and undertake mergers/acquisitions, topic to sure ceilings of web price.
Nonetheless, the Boards do not need powers for disinvestment or closure of their subsidiaries or models or stake in JVs, aside from some restricted powers given to Maharatna PSEs for minority stake disinvestment of their subsidiaries.
Subsequently, approval of the Cupboard was required for each strategic disinvestment and minority stake sale or closure of the subsidiaries or models or sale of their stakes in a JV, no matter the scale of operations or capital deployed of such subsidiaries, and so on.
“The Union Cupboard, chaired by Prime Minister Narendra Modi, has permitted the proposal for empowering the Board of Administrators of the Holding / Mum or dad Public Sector Enterprises to advocate and undertake the method for Disinvestment (each strategic disinvestment and minority stake sale) or closure of any of their subsidiaries/models/stake in JVs,” an official assertion stated.
The choice mechanism on disinvestment will accord ‘in precept’ approval for disinvestment (each strategic disinvestment and minority take sale) / closure of subsidiaries of Maharatna PSEs, which was delegated to them and assessment the method of disinvestment or closure by the father or mother or holding PSEs.
The method for enterprise the strategic disinvestment transactions/closures to be adopted by the PSEs ought to be primarily based on the rules of aggressive bidding and in step with the guiding rules to be laid down.
“For strategic disinvestment, such guiding rules shall be laid down by DIPAM. For closure, DPE shall problem guiding rules,” the assertion stated.
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