NEW DELHI: Hindustan Photo Films Manufacturing which has for long suffered as being on the list of sick industries is one of the six companies to be given the minimum public shareholding of 10 per cent requirement under a proposal accepted by the Union Cabinet.

The Cabinet Committee on Economic Affairs has approved creation of the Special National Investment Fund for the specific objective of meeting the minimum public shareholding of 10 per cent requirement in six Central Public Sector Enterprises (CPSEs).

Hindustan Photo Films has for years been responsible for supplying raw stock to filmmakers.

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 five years.

(iv) The funds realised 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.

Under the Securities Contracts (Regulations) (Second Amendment) Rules 2010 of 9 August 2010, all government companies are required to have at least 10 per cent public shareholding and where public shareholding is less than 10 per cent, the companies were required to comply with this condition within a period of three years by following methods permitted by SEBI for this purpose.