Richardson & Cruddas to be sold; Hindustan Diamond to wind up

In two decisions related to its investments in companies, Richardson & Cruddas (1972) Limited (R&C) and Hindustan Diamond Company Private Limited (HDCPL), the government has decided get out of them.

The Cabinet, under the chairmanship of Prime Minister Narendra Modi, approved on Wednesday the proposal of the Department of Heavy Industry for enabling (R&C), a sick Central public sector undertaking, to come out of the purview of the Board for Industrial & Financial Reconstruction (BIFR), according to an official release. For this purpose Cabinet approved the conversion into equity of the government loan of Rs 101.78 crore given to the company, along with the interest amounting to Rs 424.81 crore accrued on this loan.

The Cabinet further approved in principle, the strategic sale of Nagpur and Chennai units of the company and the shifting of operations from Mumbai land to other locations of company. However, the Company’s land in Mumbai will be converted from leasehold to ‘Occupation Class II’ so as to enable the company to identify the best use of this piece of land for optimal utilization as per government guidelines.

The Cabinet Committee on Economic Affairs, also chaired by the Prime Minister, 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).

The HDCPL was incorporated in 1978. The objective of formation of the company was to supply rough diamonds to diamond processing industry in India, particularly to small and medium diamond jewelry exporters, who had no direct access to rough diamonds from Diamond Trading Company (DTC), London, the marketing arm of De Beers which 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 sight holders with top diamond producers now.