Centre Rejects Malaysian Firm & #39;S Plan For 100% Arm

The Centre has rejected a proposal of IJM Construction, a group firm of Malaysia's leading infrastructure and constructions group IJM Corporation, to increase its holding in its Indian subsidiary IJM (India) Infrastructure Ltd from 70 per cent to 100 per cent through an additional investment of Rs 50 crore.

The money was proposed to be pumped into the Hyderabad-based subsidiary in five years. The company was also acquiring the 30 per cent financial interest in the subsidiary held by resident shareholders.

According to sources, IJM is working on several highway and construction projects in the country either through a joint venture or global contracts in consortium with several other partners.

 

Government sources said that the proposal which was put up for consideration of the Foreign Investment Promotion Board (FIPB) recently was turned down since the Union ministry of urban development and poverty alleviation observed that the application does not conform to the existing policy guidelines related to the real estate sector. The ministry, therefore, recommended rejection of the application.

Sources said that IJM had proposed to bring in Rs 50 crore through its Mauritius-based investment holding subsidiary, IJMII (Mauritius) Ltd. The investment was also proposed to be made along with repatriation benefits.

However, as per the extant policy, 100 per cent subsidiaries in companies developing real estate is yet to be permitted, though there has been announcements to this effect in the Union finance minister's Budget speech. Industry sources say that the policy is yet to be notified.

IJM Corporation is one of the largest and diversified construction groups in Malaysia. The company is listed on the Kuala Lumpur Stock Exchange since 1986. IJM's global focus is on contracting, construction management, property development and infrastructure investments in India, Australia, Latin America and China.

The company was established in 1983 following the merger of three Malaysian construction firms. IJM specialises in infrastructure and building works ranging from piling and foundation, highways, roads and bridges, power, oil and gas, water supply, marine works, hospitals and medical centres, condominiums, hotels, resorts and clubs, residential, commercial and industrial complexes to preservation and refurbishment works.

The focus of IJM's overseas ventures are construction and construction management, property development and infrastructure investments. The group has completed projects in Singapore, Hong Kong, Bangladesh, Pakistan, Mauritius, Sri Lanka while venturing into new markets such as Vietnam, Myanmar, the Philippines, Chile and Namibia.

In India, IJM is working on several projects including the Mumbai-Pune Expressway, the Chennai Bypass and similar roadways projects in Andhra Pradesh and Chennai. It has a strategic alliance with the Hyderabad-based Maytas Infra and is also part of a consortium developing infrastructure for the Gautami Power project.