New Delhi: Profit-making state-run companies are willing to play angel investors in loss-making ones in a bid to turn them around, but they want their effort to be acknowledged and that they get the right incentives.
They have offered to bail out the loss-making companies if their revival efforts are counted towards the mandatory 2 per cent corporate social responsibility (CSR) spending.
“Companies are willing to come forward, but want such efforts to be part of their CSR activity,” said a government official who is aware of the deliberations, but did not reveal the names of the companies. Under the Companies Law 2013, funds infusion to revive sick companies is not included as permissible CSR activity.
A senior official with a blue chip PSU emphasized that there has to be some incentive for nurturing a sick enterprise. “If there’s no strategic advantage for us, which is the case with most sick companies, then including it in our CSR spend is most appropriate,” he said.
According to government data, there were 61 sick public sector companies at end of March 2013. About 50 central public sector enterprises, including Air India, BSNL, MTNL and ITI, have been making losses for past three fiscals.
“We will take up this issue with the ministry of corporate affairs,” said the above quoted government official, adding that such clause can also help rope in private players.
Earlier, the government had formed a committee under NTPC chairman Arup Roy Choudhury to look into the formation of a firm with mandate to revive or sell sick state-run enterprises .
Source : ET