Business
Centre cites 2018 HC ruling on IDBI stake dilution
Livemint··7h ago
The Finance Ministry said a Delhi High Court judgment of 17 December 2018 does not bar diluting the Centre's IDBI Bank stake. A 2003 amendment to restrict dilution was rejected and never entered the IDBI Repeal Act, the PIB note said. Fairfax is set to acquire a 60.72 percent stake for about Rs 53,000 crore, subject to approvals.
Prism
What It Means For You
- The ministry says promissory estoppel from 2003 parliamentary speeches cannot stop the IDBI stake sale.
- Fairfax would take about 60.72 percent, combining the Centre's 30.48 percent and LIC's 30.24 percent stakes.
- RBI, CCI and other statutory approvals are still required before the deal closes.
What's Happening
- The Centre's share is valued around Rs 26,620 crore and LIC's around Rs 26,440 crore in the PTI figures cited.
- Budget speeches in 2017 and 2022 reiterated transforming IDBI and pursuing strategic disinvestment.
- The sale process began in 2022 and earlier bids had fallen below the reserve price.
What The 2018 Court Said
- In All India IDBI Officers' Association v. Union of India, the court dismissed the writ petition.
- It held that House statements cannot override the enacted IDBI Repeal Act, 2003.
- The Act as passed contained no bar on reducing or divesting government shareholding.
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