British India Corporation Limited (Acquisition of Shares) Act,1981
Act No : 29
Section : PRELIMINARY
BRITISH INDIA CORPORATION LTD (ACQISITION OF SHARES)ACT, 1981
29 of 1981
11 September, 1981
STATEMENT OF OBJECTS AND REASONS British India Corporation Limited, Kanpur, was registered as a Public Limited Company in 1920. The Corporation had two Woollen Mills directly owned and run by it, namely, Cawnpore Woollen Mills (CWM), Kanpur and New Egerton Woollen Mills (NEWM), Dhariwal. Together, these unit's employed about 8,000 persons and were engaged in the manufacture of pure woollen and blended goods. Besides, the Corporation also had substantial shares in various other companies, like the Elgin Mills Co. Ltd., Brushware Ltd., Cawnpore Textiles Ltd., Cawnpore Sugar Works Ltd., Champaran Sugar Co. Ltd., Saran Engineering Co. etc. 2. The Issued and Subicribed Capital of the Corporation was Rs, 4.06 crores consisting of 81,000 Cumulative Preference Shares (valued at Rs. 81 lakhs) and 65,00,000 Ordinary Shares (valued at Rs. 325 lakhs). The President of India and Public Financial Institutions together held substantial shares in the Corporation. The other major shareholders belonged to the Bajoria family. The trounced performance of the Corporation during the last two to three years had been becoming a matter of great concern. Losses were mounting and liquidity position was severally affected. The Corporation was on the varge of collapse, the, affecting the production of goods so vital to the needs of general public, besides affecting the employment of a large number of persons directly on the one hand and adversely affecting the interests of the Government, public financial institutions and the State Bank of India, its bankers, on the other. The Central Government had repeatedly to issue guarantees totalling Rs. 817 lakhs to keep the Company going. 3. The plant and machinery of the Corporation required to be modernized and renovated but the Corporation was not in-a position to complete even the first phase of this important exercise. Further, substantial investments of public funds when called for. However, it was considered prudent for the Government and for the financial institutions to invest more funds in the Corporation only if the ownership vests wholly with the Government. It was, therefore, decided to acquire compulsorily all the shares of the Company which were in private hands. Accordingly, the British India Corporation (Acquisition of Shares) Ordinance, 1981 (No 5 of 1981) was promulgated by the President on 11th June, 1981. 4. The Ordinance, apart from providing for acquisition and transfer of all privately held shares of the Company to the Central Government provided for payment of an amount for such acquisition, management of the undertakings of the corporation after acquiring its ownership, appointment of a Commissioner of Payments for the purpose of disbursing the amount payable to the shareholders of the Company whose shares are so acquired and for other incidental and consequential matters. 5. This Bill seeks to replace the aforesaid Ordinance. - Gaz. Of Ind., 24-8-1981, Pt. II, S. 2, Ext., p. 483.
An Act to provide for the acquisition of certain shares of the British India Corporation Limited with a view to sccuring the proper Management f the affairs of the Company and the continuity and development of the production of goods which we vital to the needs of the country and for matters connected therewith or Incidental thereto WHEREAS Messrs British India Corporation Limited, Kanpur are engaged in the manufacture and production of pure and blended woollen fabrics which are vital to the needs of the general public; AND WHEREAS as a result .of an investigation made under section 15 of the Industries (Development and Regulation) Act, 1951certain directions were issued to the Company under section 16of the Act which inter alia, included the modernisation of the plant and machinery of the undertakings of the Company, AND WHWREAS forR the purpose of carrying out. the said directions, public financial institutions had advanced large sums of money to the Company; AND WHEREAS the Central Government and certain public financial institutions have also invested considerable .funds in the share capital .of the Company. AND WHEREAS the State Bank of India has advanced considerable sums to the Company and a part thereof has been guaranteed by the Central Government; AND WHEREAS futher investment of large sums of money is necessary for the maintenance and development of the production of the undertakings of the Company and for securing the proper management of the affairs of the Company, AND WHEREAS acquisition by the Central Government of an effective control over the affairs of the Company is necessary to enable it to make the investments aforesaid; BE it enacted by Parliament in the Thirty-second Year of the Republic of India as follows :-
CHAPTER 01: PRELIMINARY
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