The government has decided to amend the Act under which it had acquired two sick companies to create the Tyre Corporation of India Ltd, before going ahead with its divestment.
The Board for Reconstruction of Public Sector Enterprises had recommended divestment of Tyre Corporation and the Department of Heavy Industry, under which the company functions had referred it to the Department of Divestment.
The Divestment Development: Complete Coverage
The Department of Divestment had returned the case with the advice of seeking the opinion of the Attorney General on the question whether public sector companies created through an Act of Parliament can be divested without going back to Parliament.
After receiving the opinion of the Attorney General the Department of Heavy Industry has decided to approach the Parliament to get its nod for divestment of Tyre Corporation of India.
Apart from Tyre Corporation, the Department of Heavy Industry has decided to seek amendments in the Acts through which it acquired Andrew Yule, Bharat Wagon, Burn Standard and Company, Praga Tools and Richardson and Cruddas.
It has already approached the law ministry in this regard.
The approval of changes in the Act governing these companies would ensure that the government is not caught on the wrong foot if an objection is raised on the means to revive these companies.