Special National Investment Fund (SNIF) approved by CCEA
The Cabinet Committee on Economic Affairs(CCEA) on 2 August 2013 approved creation of the Special National Investment Fund (SNIF).
SNIF: Special National Investment Fund
The Cabinet Committee on Economic Affairs(CCEA) on 2 August 2013 approved creation of the Special National Investment Fund (SNIF) for the specific objective of meeting the minimum public shareholding of 10 percent requirement in the following six Central Public Sector Enterprises (CPSEs).
i) Andrew Yule & Company Ltd.
(ii) Fertilizers & Chemicals (Travancore) Ltd.
(iii) Hindustan Photo Films Manufacturing Co. Ltd.
(iv) HMT Ltd.
(v) ITI Ltd.
(vi) Scooters India Ltd.
Since these Companies were not financially sound, it was found difficult to meet the minimum public shareholding by following SEBI approved methods. However, Government was keen to comply with the requirement in all Government Companies. The Department of Disinvestment discussed the matter with SEBI and has proposed to meet the minimum public shareholding in the above six Companies.
The salient features of the Fund are:
(i) The number of shares that is required to make the six Companies compliant with the minimum public shareholding will be transferred to the Special National Investment Fund out of Government of India shareholding on irrevocable basis without any consideration.
(ii) The Fund will be managed by independent professional Fund Managers.
(iii) The Fund will sell the shares within a period of 5 years.
(iv) The funds realized from the sale of shares would be used for social sector schemes of the Government.
(v) The modalities of the sale of shares in the Fund would be decided by the existing EGoM.
Vide Securities Contracts.(Regulations) (Second Amendment) Rules, 2010 dated 09th August, 2010 all Government Companies are required to have at least 10% public shareholding and where public shareholding is less than 10%, the Companies were required to comply with this condition within a period of 3 years by following methods permitted by SEBI for this purpose.