DIPAM Asks Its Officers Not to Trade in Shares of State-Owned Companies

Sub : Eco

Sec: Capital market

Background:

The Department of Investment and Public Asset Management (DIPAM), which is under the Ministry of Finance, has directed its officials to refrain from trading shares of public sector companies to prevent misuse of market-sensitive information.
DIPAM handles government equity in public sector enterprises and is responsible for minority stake sales, strategic disinvestment, and privatisation of these companies.

Key Directives:

Internal Order to Prevent Trading:
- DIPAM issued an internal order stating that officials must not buy or sell shares of state-owned companies.
- Reason: Officers might have access to market-sensitive information that could influence the share prices of companies, and trading could lead to insider benefits.
Declaration of Holdings:
- New officers joining the department are required to declare their holdings in public sector enterprises (PSEs).
- Any such shares held by officials can only be liquidated after approval from the authorities, ensuring transparency and fairness.

Role of DIPAM:

Maximising CPSE Share Value:
- DIPAM’s primary goal is to maximize the value of Central Public Sector Enterprises (CPSE) shares while ensuring that no misuse of price-sensitive information occurs.
Government Equity Sale:
- The department manages the sale of central government equity through various means, such as offer for sale, private placement, and strategic disinvestment.
- DIPAM also advises on the financial restructuring of CPSEs to attract investment through capital markets.