Top-level government sources told FE that the relaxation would, however, come with more stringent disclosure norms for the PSUs, akin to that for other companies. A policy is being prepared and may be tabled in the winter session, a source said.
The sources said the special regulatory dispensation for PSUs may be on its way out. PSU directors would carry the same liabilities as their counterparts in other companies. There would be no selective exclusions for PSU directors from liabilities.
According to sources, a CAG audit in addition to the normal audit was superfluous and caused avoidable delays. If you want PSUs to grow and have professional management, it is necessary they are treated at par with other public companies, the source said.
As regards the proposed policy change, inter-ministerial discussions are on. Many PSUs dont have their accounts audited for even 10-12 years because of certain working problems, one of which, of course, is the special exclusion of directors from liabilities.
| NO LONGER SPECIAL |
| • Special dispensation for PSU commercial ventures makes them inefficient • CAG gaze in addition to statutory audit superfluous, causes delays • PSU directors to carry same liabilities as their counterparts in other companies • New policy likely to be announced in winter session of Parliament |
The Irani committee on the company law had said that special exemptions and protections to commercial ventures taken up by PSUs in the course of their commercial operations along with strategic partners or general public should be done away with.
It also expressed concern over the delays in finalisation of the accounts of PSUs. In many cases, state-owned companies and their directors become liable for penal action but are provided selective exclusions from their liabilities only because they are government companies. This was leading to an unhealthy situation which must be addressed, it said.