The government has made security clearance mandatory for all bidders 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 told PTI.
“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.
However, the Department of Investment and Public Asset Management (DIPAM) had last week issued a proforma of the application for security clearance of the acquirers.
As per 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, address, parentage, unique ID number of the country of residence and passport number, of its directors and partners.
It further states, a self-declaration regarding the nature and extent of presence/operation of the bidder in China and Pakistan, if any would have to be provided by them. In a strategic sale, bidders first put in expressions of interest or preliminary bids. After that due diligence is carried out by the government, while the bidders also get access to company’s books.
The government has budgeted to collect Rs 1.75 lakh crore from disinvestment in next fiscal, up from Rs 32,000 crore estimated to be mopped up in current fiscal.