Public Sector Enterprises (PSEs) wanting to divest stake in their subsidiaries would be required to submit the proposal to their respective administrative ministries, as per guidelines issued by DIPAM on Thursday.
Earlier, the sale of majority or minority stake in subsidiaries or units of PSEs was undertaken by the Department of Investment and Public Asset Management (DIPAM).
After the Cabinet in June allowed PSEs to decide and implement stake sale in their subsidiaries, the DIPAM on Thursday laid down guiding principles for strategic disinvestment/minority stake sale of PSE subsidiaries/units or their joint ventures.
As per the guidelines, the board of holding/parent PSE would recommend strategic disinvestment/minority stake sale of its subsidiaries/units/JVs to the administrative department which would examine the proposal and send it to DIPAM.
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DIPAM would then seek 'in-principle' approval of the Alternative Mechanism (AM) on disinvestment, chaired by the Union Finance Minister.
The decision of the AM would be communicated to the parent public sector enterprise, following which its board would undertake the transaction.
"Strategic disinvestment/ Minority Stake sale of subsidiaries/units/ sale of stakes in JVs to be undertaken by the Board of the holding/parent PSE may be based on a process ensuring highest degree of integrity and probity," the DIPAM said.
The actual transactions for strategic disinvestment and minority stake sale may be carried out under the supervision and control of the board of the holding/ parent PSE as per the powers delegated to them. The board may form a sub-committee to assist them in such transactions, it added.
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The board of the holding/ parent PSE may set out the actual procedure for the transaction, considering the specifics of the transaction and in the interest of their timely and successful execution, it said.
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