PSU units' privatisation to require extensive due diligence, clearance

As per the process for privatisation of PSU units, minority sale and stake sale in JVs shared by the DIPAM, boards will recommend mode of transaction to their administrative department

Public sector undertakings (PSUs) looking to privatise their subsidiaries will have to undertake extensive due diligence of qualified bidders that will include status of insolvency court cases, probe by investigative agencies as well as security and political clearance.

As per the guiding principles for privatisation of units shared with government departments on Tuesday, PSU board shortlisting their subsidiary or units will have to appoint transaction and legal advisers who will be required to obtain a “security/political clearance” of qualified bidders. An approval on national security grounds, and permission for foreign investments will have to be obtained from relevant government ministries