COVID-19 crisis: Govt to ensure firms don’t get picked up at throwaway prices says FM Sitharaman
Team Udayavani, May 30, 2020, 8:09 AM IST
New Delhi: The threat of hostile takeovers is certainly a worry and the government will ensure that Indian businesses do not get snapped up at throwaway prices, Finance Minister Nirmala Sitharaman said on Friday.
The outbreak of COVID-19 has hit industries across the world due to depressed demand caused by lockdowns. So, the market provides opportunities to players with deep pockets to buy companies in distress at a very cheap valuation, she said.
“That’s a reality but we have to take care that businesses which have been built by the sweat and toil of Indians, and which have had great brand value, cannot be allowed to be picked up by people who are just looking for an opportunity.
“So, that is a factor which all of us are worried about and that’s a factor on which we will certainly do something to ensure that Indian industries don’t get picked up at a throwaway price because we want them to be able to run the business once everything is normal,” Sitharaman told television channel WION in an interview.
Last month, the government decided to put restrictions on foreign direct investment (FDI) to clamp down on investors from countries like China buying Indian companies cheap.
The amendments to the FDI rules were necessitated on concerns among officials as well as businesses about possible takeover attempts at a time when share prices are down due to the COVID-19 crisis.
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