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Government sells Rs 1,100 crore worth of ‘enemy shares’ in Wipro

Author: Shilpa Phadnis
Publication: The Times of India
Date: April 5, 2019
URL:      https://timesofindia.indiatimes.com/business/india-business/govt-sells-rs-1-1k-cr-worth-of-enemy-shares-in-wipro/articleshow/68731039.cms

The central government sold over Rs 1,100 crore worth of Wipro shares on Thursday, shares that were lying with the home ministry's Custodian of Enemy Property of India (CEPI).

The sale appears to be the first such by the government. The shares, belonging to Pakistani nationals, were seized by India under the Enemy Property Act passed in 1968, following the conflicts with Pakistan and China in the 1960s.

CEPI sold 4.3 crore shares in the Azim Premji-owned company for Rs 258 apiece. Most of it, 3.9 crore, was bought by the Life Insurance Corporation of India (LIC).

An estimated Rs 3,000 crore in shares and over Rs 1 lakh crore in immovable property (mostly land) are said to be with the Custodian of Enemy Property. The sale of Wipro shares became possible following an amendment to the Enemy Property Act in 2017 to ensure that successors of those who migrated to Pakistan and China during partition would have no claim over the properties left behind in India.

The amendment was done to overcome a Supreme Court clarification of 2005 that said that the Custodian was merely an administrator and the ownership of the assets rested with the owner. The court said that on the death of the enemy owner (the person who moved to Pakistan or China), the property should be inherited by their legal heirs (who may be Indian nationals). This had prompted some of the heirs in India to lay claim to the assets.

In November last year, the Cabinet approved the mechanism and procedure to sell enemy shares. It also said the sale proceeds would be deposited as disinvestment proceeds with the finance ministry.

In February, a high-level committee was set up to recommend the quantum and price for the sale of shares. The Wipro sale appears to be the first sale under this process. The shares are said to have belonged to two Pakistanis.

Pakistan too had similarly acquired properties of those who had moved to India. The country is said to have liquidated these assets. The Indian government was under pressure to compensate these Indian nationals using the Pakistani assets it took control of. The status of that is not clear.

Totally, some 6.5 crore shares in 996 companies of 20,323 shareholders are under the custody of CEPI. Of these 996 companies, 588 are functional/ active companies, and 139 of these are listed.
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