Security nod must for all PSU bidders

„Dipam tweaks 2018 guidance note

New Delhi, Feb. 21: The government has tweaked the guidelines for strategic disinvestment, making security clearance mandatory for all bidders who put in price bids for buying a central public sector enterprise (CPSE).

Now, financial bid would be opened by the evaluation committee on strategic disinvestment only after potential suitors get security clearance, an official said.

The government has lined up sale of its majority stake along with management control in BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam in the next fiscal.

The guidance note framed in 2018 on strategic disinvestment by the Department of Investment and Public Asset Management (Dipam) said that the core group on disinvestment, headed by cabinet secretary, would decide on a "case-to-case" basis whether security clearance is required for the "highest bidder" for the sale.

If the highest bidder does not get security clearance, the next highest bidder was given the option to match the price offered by the highest bidder.

An official said that the guidance note has been tweaked since it has come to notice that there was some ambiguity in the rules.

"Once financial bids are opened, the whole process

of strategic sale almost reaches its closure. If after that, security clearance is not obtained by the highest bidder, then the whole process goes waste," the official added.

Dipam had last week issued a proforma of the application for security clearance of the acquirers.

According to the performa, any interest of more than 10 per cent in the bidding entity would require disclosures of parentage and beneficial ownership to get a security clearance.

In case the acquirer is a sole bidder, then it has to share with the government details, like nationality, its directors and partners.