Section 2 of The Tyre Corporation of India Limited (Disinvestment of Ownership) Act, 2007
Disinvestment in the company.
Where the Central Government, on the recommendations of the Board for Reconstruction of Public Sector Enterprises, is of the opinion that disinvestment is to be made in the Tyre Corporation of India Limited (hereinafter referred to as the company), it may pass an order providing for transfer, exchange or relinquishment of shares in the company to any person on such terms and conditions as may be agreed upon.
Summary
- The Central Government has the power to decide if disinvestment, which means selling or reducing government ownership, should take place in the company.
- Before making this decision, the Central Government must receive recommendations from the Board for Reconstruction of Public Sector Enterprises.
- If the government decides to go ahead, it will issue an order to transfer, exchange, or give up (relinquish) shares in the company.
- The shares can be transferred to any person under terms and conditions that are mutually agreed upon.
Practical examples
FAQ
1. Who must make a recommendation before the Central Government can decide on disinvestment?
The Board for Reconstruction of Public Sector Enterprises must recommend disinvestment first.
2. What actions can the Central Government take with the shares under Section 2?
The government can transfer, exchange, or relinquish (give up) the shares.
3. To whom can the shares of the company be transferred?
The shares can be transferred to any person as agreed upon.
4. How does the Central Government formally authorize the transfer, exchange, or relinquishment of shares?
The Central Government authorizes this by passing an official order.
Test yourself
Q1.Whose recommendation is required before the Central Government can form an opinion on disinvestment under Section 2?
Q2.What is the short term used to refer to the Tyre Corporation of India Limited in the rest of Section 2?
Q3.Which of the following is NOT an action the Central Government can order regarding the shares under Section 2?
Q4.What terms and conditions apply to the transfer, exchange, or relinquishment of shares?
Q5.What form must the Central Government's decision under Section 2 take?