The Union government on Thursday (4 April) sold “enemy” shares in IT behemoth Wipro worth Rs 1,150 crore and is looking to classify the proceeds under its divestment agenda, reports Business Standard (BS).
The enemy property, which can include land, shares held in companies, gold etc., refers to the property previously belonging to the citizens of enemy countries (for example, Pakistan and China). These were later seized by the Indian government during times of war.
The government sold 44.4 million shares of the company at Rs 259 apiece on the Bombay Stock Exchange (BSE) in a block deal. These shares were held by the Custodian of Enemy Property for India CEPI), which is an entity of the central government formed to look after enemy properties and shares.
State-owned Life Insurance Corporation of India (LIC), New India Assurance and General Insurance Corporation bought the shares. LIC alone alone accounted for shares worth Rs 1,000 crore.
A Much-Needed Reform
On 9 November, the Union Cabinet, chaired by PM Modi, had given its ‘in-principle’ approval for the mechanism and procedure to be adopted for the sale of enemy shares. As of December 2018, a total of 6,50,75,877 shares in 996 companies were under CEPI’s possession with a cumulative value of about Rs 3,000 crore.
The govt had constituted an Alternative Mechanism (AM) committee that decided on the process of selling these shares. It was chaired by the Union Minister of Finance, Arun Jaitley and will include the Union Minister of Road Transport, Nitin Gadkari.