Cabinet approves winding up of Hindustan Diamond Company

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi today gave its approval for initiating the process of winding up of Hindustan Diamond Company Private Limited (HDCPL), a 50:50 joint venture of the Government of India and De Beers Centenary Mauritius Limited (DBCML).

HDCPL was incorporated under the Companies Act, 1956 in 1978, with the objective of supplying rough diamonds to diamond processing industry in India, particularly to small and medium diamond jewellery exporters, who had no direct access to rough diamonds from Diamond Trading Company (DTC), London, the marketing arm of De Beers who held a very large chunk of world's rough diamonds market.

The winding up of HDCPL is not likely to affect supply of rough diamonds to Indian diamantaires as Indian diamond industry has grown in these years and several Indian players are sightholders with top diamond producers now. Also, with the objective to facilitate the constant supply of rough diamonds and to make India an International Diamond Trading Hub, the government has created a Special Notified Zone (SNZ) at Bharat Diamond Bourse, Mumbai in 2015.

At present, viewing operations are being carried out in the SNZ at Mumbai wherein foreign mining companies (FMCs) only display their rough diamond lots to the Indian manufacturers and then take them back. Thereafter the sales are carried through e-auction from offices situated in other countries to Indian manufacturers. This facility has enabled even smaller Indian players to have direct access of supply of rough diamonds.

Richardson & Cruddas: The cabinet also approved the proposal of the Department of Heavy Industry for conversion into equity of the Government of India loan of Rs101.78 crore given to Richardson & Cruddas (1972) Limited (R&C), along with the interest amounting to Rs424.81 crore accrued on that loan.

The conversion of loan into equity will enable the central public sector enterprise to come out of purview of the Board for Industrial and Financial Reconstruction (BIFR).

The cabinet further approved in principle, the strategic disinvestment of Nagpur and Chennai units of the company and shifting of operations from Mumbai land to other locations of company. However, the company's land at Mumbai will be converted from lease hold to "Occupation Class II" so as to enable the company to identify the best use of this piece of land for optimal utilisation as per government guidelines.