Over 6.50 crore shares in 996 companies of 20,323 shareholders are under the custody of Custodian of Enemy Property of India (CEPI), under the Home Ministry. At the current price, these shares are estimated at around Rs 3,000 crore
The government recently approved the sale of "enemy property" worth Rs 3,000 crore. Law Minister Ravi Shankar Prasad said the proceeds from sale of enemy property will form part of the divestment receipts.
Here are important questions answered on enemy property.
What is an enemy property?
Enemy property refers to property or assets held or managed on behalf of an enemy subject or an enemy company. It also refers to assets left behind by individuals who migrated to Pakistan or China and are no longer citizens of India. These assets include land, buildings, shares held in companies, jewellery of the citizens of enemy countries.
When was the concept drawn up?
Properties belonging to Pakistani and Chinese citizens when India was at war with these countries are referred to as enemy properties. The Central government took over properties of citizens of China (in 1962) and Pakistan (in 1965 and 1971) under the Defence of India Acts.
Who manages these properties?
The Defence of India Act ceased to function after the wars. To administer these properties, the Enemy Property Act was enacted in 1968. The law empowered the Custodian of Enemy Property of India (CEPI) to manage and preserve the enemy properties
What are the recent developments around this?
Last year in March, Parliament had amended the Enemy Property Act, 1968, to bar successors of those who migrated to Pakistan and China during partition from any claim over the properties left behind in India. In the amendment of 2017, the definition of enemy was substituted by "...including his legal heir or successor, whether or not citizen of India or the citizen of a country which is not an enemy or the enemy..... who has changed his nationality”.
What are the guidelines for sale of shares?
The Union Cabinet, chaired by Prime Minister Narendra Modi, last week gave 'in-principle' approval for sale of shares which are part of 'enemy property'. The guidelines will be framed in consultation with the agencies of revenue department like the Enforcement Directorate as also officials with experience in auctioning of confiscated properties.
How are shares valued?
Over 6.50 crore shares in 996 companies of 20,323 shareholders are under the custody of Custodian of Enemy Property of India (CEPI), under the Home Ministry. Of these 996 companies, 588 are functional/active companies -- 139 of these are listed, while 449 companies are unlisted. At the current price, these shares are estimated at around Rs 3,000 crore
What is CEPI’s role?
The government had vested these properties with the CEPI. As the CEPI has no expertise in selling of shares, the government has decided to rope in the Department of Investment and Public Asset Management (DIPAM) for sale of these 'enemy shares', many of which are not even listed on the stock exchanges. The DIPAM will also decide on the modalities for appointing merchant bankers and legal advisors for sale of these shares. The proceeds of the share sale will be accounted for as disinvestment proceeds
What is the impact of the move?
The decision will lead to monetisation of moveable enemy property lying dormant for decades. Sale proceeds from this may be used for development and social welfare programmes
What are the other enemy properties?
In January this year, the process of identifying 9,400 properties worth over Rs 1 lakh crore was put in motion. Among the 9,280 properties left by Pakistani nationals, the highest 4,991 properties are located in Uttar Pradesh followed by West Bengal which has 2,735 such estates. As many as 487 properties are located in Delhi. Among 126 properties left behind by Chinese nationals, 57 are located in Meghalaya and 29 are located in West Bengal. Seven are in Assam.Collated by Vandana Ramnani.The Great Diwali Discount!
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