The cabinet today cleared the transfer of administrative control of HPIL from the telecom ministry to the housing and urban development ministry after equity infusion of Rs 700 crore and Rs 51 crore secured loan into the company.
As a special purpose vehicle (SPV), HPIL is managing the transfer of surplus land from Tata Communications, formerly VSNL, to the government.
The decision brings about one-and-half decade old case in the final lap.
"The Union Cabinet chaired by Prime Minister Shri Narendra Modi has approved the transfer of administrative control of Hemisphere Properties India Ltd (HPIL), PSU from the Department of Telecommunications (DoT) to the Ministry of Housing and Urban Affairs (MoHUA)," an official statement said.
The transfer will be executed after infusion of equity amounting to Rs 700 crore and Rs 51 crore secured loan from government into the company and implementation of scheme of arrangement for de-merger of surplus land, it said.
Government disinvested majority stake from Videsh Sanchar Nigam Ltd (VSNL), now Tata Communications, in February 2002 and passed on to the Strategic Partner, Panatone Finvest Ltd (PFL), a special purpose vehicle under the Tata Groups of Companies.
At the time of disinvestment, 773.13 acre surplus land in 4 cities -- Pune, Kolkata, New Delhi and Chennai (out of a total of 1,230.13 acres of land) -- was demarcated. It was decided that the surplus land will not be a part of the disinvestment bid.
As per the share holding agreement, PFL undertook an obligation to de-merge or hive off the surplus land into a realty company.
In 2005, the Cabinet had approved a SPV -- HPIL -- under the telecom ministry to execute the transaction related to the surplus VSNL land.
The Cabinet has authorised DoT "to undertake all steps incidental for transfer of equity stake in HPIL from Ministry of Communications to the Ministry of Housing and Urban Affairs (MoHUA) infusion of equity and implementation of Scheme of Arrangement."
The Cabinet granted an exemption to HPIL from the policy of government relating to Foreign Direct Investment in real estate business.
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