The Union Cabinet Wednesday empowered the boards of the Central Public Sector Enterprises (CPSEs) to privatise, disinvest or close their subsidiaries and stakes in joint ventures. The move will give a fillip to the government’s efforts to unlock capital, which are either stuck or sub-optimally employed in state assets, and put these into more productive use.
Many large profit-making CPSEs like Coal India, ONGC and NTPC have valuable subsidiaries or JV partnerships. The Cabinet decision will enable them to monetise parts of these assets without having to secure the approval of the Cabinet or go through the process involving the administrative ministries and/or the department of investment and public asset management (Dipam).
The move is also expected to reduce the burden on Dipam, which will could now focus on privatisation of holding companies or parent CPSEs. Currently, there are about 380 PSEs (including subsidiaries), 20-30 per cent of which may be closed for being sick or unviable. The government has made it clear that except for the sake of having its minimum presence in the four strategic sectors, other companies in the strategic sectors and all in non-strategic sectors will be privatised or closed. Currently, CPSE Boards do not have powers for disinvestment/closure of their subsidiaries or units or stake in JVs, except some limited powers given to Maharatna PSEs for minority stake disinvestment of shareholding in their subsidiaries. —FE. Musk has been a vocal critic of the Biden administration and Democrats for their proposals to tax billionaires and give more tax incentives to union-made electric vehicles. Tesla does not have unions at its US factories.
Last year, Tesla, which counts California as its biggest market in the United States, moved its headquarters from California to the more politically conservative Texas.
Musk moved his personal residence from California to Texas, where there is no state income tax. He has sold about $25 billion worth of Tesla stock since last year in order to pay taxes and finance his proposed acquisition of Twitter. Analysts said the sales helped him cash in on Tesla’s stock rally and diversify his wealth. Melvin Capital, the hedge fund run by Gabe Plotkin that struggled with heavy losses last year as it reeled from wrong-way bets on GameStop, is shutting down, according to a letter sent to investors on Wednesday that was reviewed by The New York Times.
Mr. Plotkin wrote to his investors that he had decided that the “appropriate next step” was to liquidate the fund’s assets and return cash to all investors.
Mr. Plotkin, who founded Melvin in 2014, also wrote that he recognized he needed to “step away from managing external capital.”
Mr. Plotkin, a protégé of the hedge fund billionaire and New York Mets owner Steven A. Cohen, had wagered that shares GameStop, AMC Entertainment and other mall mainstays from the 1990s would fall as their businesses shrank.
Instead, the stocks skyrocketed when amateur investors, coordinating via Reddit, Twitter and other social media sites and determined to outsmart big Wall Street funds, kept buying up shares and propping up their price.
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