Govt seeks ‘quality’ advisors | business | Hindustan Times
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Govt seeks ‘quality’ advisors

The government has sought the opinion of the Central Vigilance Commissioner (CVC) for changing norms to appoint investment bankers who will advise it on divesting stake in public sector undertakings (PSUs).

business Updated: Jan 24, 2010 20:30 IST

The government has sought the opinion of the Central Vigilance Commissioner (CVC) for changing norms to appoint investment bankers who will advise it on divesting stake in public sector undertakings (PSUs).

“We have approached the CVC...the response is expected anytime,” Disinvestment Secretary Sunil Mitra said.

Last year, the Government had identified over 60 central public sector undertakings for disinvestment over the next few years to bridge the gaping fiscal deficit and fund its social sector and infrastructure programmes.

Under the plan, the Centre would dilute up to 10 per cent of its stakes in unlisted CPSUs through IPOs. In the listed PSUs, it would have to dilute up to 15 per cent through follow-on public offers to meet SEBI guidelines.

The proposed regulations would help the government modify the criteria for choosing investment bankers from cost-basis to quality-cum-cost basis,.

The objective is to give more weight to the quality of these advisors and not just the cost.

Currently, the investment bankers are selected on the cost-basis, under which the technically qualified investment bankers are selected on the basis of the lowest bid.