Share allotment in PSU selloffs under CVC lens

Corporate governance issues have started surfacing as the government puts the disinvestment agenda on the fast track. The Central Vigilance Commission (CVC) has raised questions on allotment of shares in public offering issues of public sector units. According to a CVC report, there have been irregularities in allotment of shares through preferential quota meant only for the employees.

The CVC report mentions that a chief vigilance officer (CVO) of a public sector enterprise was allotted shares in the initial public offering (IPO) of the public sector unit from the preferential allotment quota meant only for employees. The report raised questions on such allotments made to other government-appointed officials in the public sector companies.

���Certain objections were raised by the CVC, which felt that such extraordinary benefits compromise the independence and objectivity of CVOs in overseeing vigilance administration in public sector companies,��� said an official from department of disinvestment (DoD), who did not wish to be quoted.

The government has now come out with specific orders debarring all CVOs and other officials, who are not employees of the public sector units from seeking allotment of shares in public issue under the employee quota. ���After the CVC report, we���ve decided to restrict the allotment of shares for the case brought to our notice. Also, all administrative ministries have been now directed to instruct their public sector undertakings,��� said a department of public enterprises (DPE) official on condition of anonymity.