Law Ministry for monitoring firms hired by PSUs during disinvestment

Concerned that some public sector undertakings (PSU) could be ignoring norms while hiring law firms to defend their cases and also helping in the ongoing disinvestment process of Engineers India Ltd and Coal India Ltd,the Union Ministry of Law would now keep a close tab on the manner in which law firms are hired.

The Ministry is also mulling formulating guidelines for the PSUs and various ministries in this regard. The immediate provocation for the ministrys move is the series of complaints that have reached the Central Vigilance Bureau and the ministry against the Disinvestment Department and some PSUs on the procedure of hiring law firms.

It is learnt that the Disinvestment Ministry has received a complaint alleging that a discriminatory procedure was adopted while sending request for proposal by law firms for the disinvestment of Engineers India Ltd and Coal India Ltd. Sources said the complaints also accuse the department of trying to favour the law firm set up two years ago by the son of a politician.

There must be set guidelines that have to be followed. The government should not suffer, said Union Law Minister M Veerappa Moily.