The Daily PulseTrending
Former Bureaucrat Criticizes IDBI Bank Sale, Flags Conflict of Interest
Reported by Sneha Patil (Staff Writer) · BusinessLine ·
Confirmed by a second source: Telegraph India
Photo: Wikimedia CommonsFormer Union Secretary EA Sarma has strongly criticized the government's handling of the IDBI Bank stake sale, warning that more problems could emerge from the process.
Conflict and Demands
Sarma wrote a letter to the Union Finance Minister pointing out a major conflict of interest. A director of the Life Insurance Corporation of India, which owns a pre-sale stake of 49.24 percent, also sat on the board of the winning bidder's subsidiary, Canada-based Fairfax. Because of such issues, Sarma demanded an independent enquiry that should share its findings with Parliament and the public. He also wants the ongoing sale process kept on hold until that enquiry finishes.
Valuation Concerns
The government sold its equity at 81 rupees per share, which is lower than the average share price of 88.52 rupees recorded in 2025-26. Sarma also pointed out that IDBI holds a 50-plus-acre land plot in Hyderabad. A recent state government auction valued land in that area at 269 crore rupees per acre, meaning IDBI's Hyderabad land alone could be worth 13,450 crore rupees. He questioned whether such high property values were properly counted before the aggregate sale of 60.72 percent equity to the Canadian firm.
Context
The Department of Investment and Public Assets Management manages the sale of government stakes in public sector companies. Disinvestment decisions often face public debate over asset valuation and the transfer of public wealth to private or foreign owners.
ExplainerWhy this matters
What Happened
The government and DIPAM moved forward with selling a majority stake in IDBI Bank to a Canadian firm named Fairfax. Former bureaucrat EA Sarma raised serious objections, pointing to low valuation, a conflict of interest involving an LIC director, and a lack of open competition.
Why It Matters
Selling public assets to foreign private entities raises questions about national ownership of development financial institutions. Critics argue that state-backed institutions can manage public resources effectively on their own, and selling them off undervalues hidden assets like prime urban land and growing company profits.
What Happens Next
It remains to be seen whether the government will pause the disinvestment process or launch an independent enquiry as demanded by critics to review the transparency of the bidding and valuation methods.
More in Trending
Photo: Wikimedia CommonsTrendingVerified — Confirmed by a second source: India TV HindiImportant
Afghanistan Cracks Top Six in ICC ODI Rankings After Passing Sri Lanka
Reported by Rohit Yadav (Staff Writer) · Dainik Bhaskar ·
