Shift in stance: Govt likely to indemnify PSU buyers from past claims

Litigation-free assets among several buyer-friendly steps

The government has become flexible to the interests of buy­ers as it looks to move ah­e­a­d with its ambitious privatisation drive.

The government, in pre-bidding consultations, has informed potential buyers of public sector undertakings (PSUs) that they will not be held liable for any claims arising prior to the sale of state-owned entities. This will be done through the representation and warranty clause in the share purchase agreement, which is a shift from the government’s earlier stance of selling assets on an ‘as is where is’ basis.

This comes in the backdrop of Devas Multimedia and Cairn Energy moving a New York