Keralam to withdraw investment in Uralungal, eyes exit from CMRL

Thiruvananthapuram: The state government has decided to withdraw its investments in Uralungal IT Infra Private Limited. The Kerala State Industrial Development Corporation (KSIDC), under the Industries Department, has decided to recover its remaining investment of ₹6.55 crore in Uralungal IT Infra, along with the dividend. The investment was made through preference shares in July 2010, towards the end of the VS Achuthanandan government.

Of the ₹8.19 crore invested, Uralungal had already returned ₹1.63 crore. The KSIDC cited the expiry of the investment agreement as the reason for withdrawing the remaining amount.

Separately, the corporation has sought legal advice on exiting its 13.41 per cent stake in Cochin Minerals and Rutile Limited (CMRL), which is under scrutiny in connection with the CMRL-Exalogic financial transactions. The move comes amid investigations by central and state agencies into the controversial dealings and marks a possible end to the KSIDC's 35-year association with the company.

The KSIDC acquired its stake in CMRL between 1991 and 1994, purchasing 10.5 lakh shares at ₹10 apiece for ₹1.05 crore. The investment is currently valued at around ₹26 crore. The corporation has also earned ₹6.33 crore in dividends over the years.

The KSIDC has an understanding that investments yielding an annual growth rate of less than 10 per cent can be withdrawn. Although its CMRL investment has delivered a higher growth rate, the decision to exit is being considered specifically in view of the controversies surrounding the company.

The corporation has sought legal advice to work out a formula for withdrawing its investment.