The government said on Friday that it has approved the creation of a special investment fund for meeting the minimum public shareholding of ten per cent in six financially-sick Central Public Sector Enterprises (CPSEs).

The decision was taken by the Cabinet Committee on Economic Affairs (CCEA) at a meeting chaired by Prime Minister Manmohan Singh late on Thursday.

The six companies are Kolkata-based Andrew Yule, Fertilizers and Chemicals (Travancore), Hindustan Photo Films, HMT (Hindustan Machine Tools), Bangalore-based ITI (Indian Telephone Industries) and Scooters India.

“Since these companies were not financially sound, it was found difficult to meet the minimum public shareholding by following SEBI (Securities and Exchange Board of India) approved methods. However, the government was keen to comply with the requirement in all government companies,” an official statement said on Friday.

According to the statement, the fund will be managed by independent professionals who will sell the company’s shares within a period of five years. The funds gained by the sale of shares would be used for government’s social sector schemes.

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