Former official urges pause on IDBI Bank stake sale pending inquiry

what happened

Former Indian government secretary EAS Sarma has asked that the October 14 cabinet decision to sell the government's and LIC's holdings in IDBI Bank be suspended until an independent inquiry is completed. He wants the findings presented to Parliament. He made the appeal in a letter to Finance Minister Nirmala Sitharaman, according to TradingView.

The cabinet has reportedly picked Canada-based 10955230 Canada Inc., whose parent is Fairfax Financial Holdings, as the strategic buyer. The consideration is Rs 52,878 crore for a 60.72 per cent stake, split between the government's 30.48 per cent and LIC's 30.24 per cent. Sarma called the price a 'pittance' and cited legal risks and undervaluation of the bank's assets.

why it matters

For investors, the key issues are the size of the deal and the risk of legal challenges or delays that could push back the transfer of control. The dispute also raises questions about how state assets are valued and how transparent privatisation processes are.

market impact

Indian banks: legal challenge risk could delay IDBI Bank deal and weigh on privatisation sentiment

tags

instruments