New Delhi: What is a Public Sector Undertaking company or a PSU? The straight answer is a company that is owned by the Government of India or any of its state government or Union territory. How this ownership is determined? The promoter that has at least 51% share of the company or above has the ownership rights of the company. So now that the Government of India given in-principle approval for strategic disinvestment of Bharat Earth Movers Limited (BEML Ltd) it is pertinent to ask whether BEML still is a Public Sector Undertaking company?
Stage set for disinvestment
Government has initiated the process of strategic disinvestment of BEML Ltd. to the extent of 26% out of the govt shareholding of 54.03% with the transfer of management control to a strategic buyer. The transaction advisor, legal advisor and asset valuer have also been appointed as per the procedure and mechanism laid down for this purpose. The Expression of Interest (EOI) and Preliminary Information Memorandum (PIM) document have also been prepared by the appointed advisors and submitted to the Government, all of this a couple of months back.
According to the information given by MoS Defence Shripad Naik in the Lok Sabha, some organisations have made certain representations against the disinvestment proposal of BEML Ltd. But none has been finalised so far. Because the final decision on disinvestments through the strategic sale is considered based on recommendations of NITI Aayog, which is still in the pipeline.
So is BEML still a PSU?
In theory, and in practice too, BEML remains a PSU as a majority of its shares are held by the Government of India (54.03%). Naturally, once the Government loses the controlling stake in the hands of strategic disinvestment, BEML will lose the tag of a Public Sector Company.