PSU privatisation: Govt to amend security clearance policy for investors

The changes are being proposed to obviate situations when a highest bidder fails the security clearance in the case of investment from China or other bordering nations on grounds of national security

To tighten the noose on investment from bordering countries, the government is set to amend its security clearance policy for investors participating in privatisation or strategic divestment in public sector undertakings (PSUs).

The security committee that gives clearance to the highest bidder (H1) in privatisation or strategic divestment is set to mandate security approval for all entities participating in financial bidding and not just the highest bidder, which is the practice now, according to a top government official. The proposal is to bring security clearance in line with the government’s foreign direct investment policy, which was tweaked to curb hostile takeovers