The Hindu Business Line : HTL may lose over Rs 100 cr in land deal issue

HTL stands to lose over Rs 100 crore on its land deal if the Tamil Nadu Government follows through with its decision to ‘purchase or take back’ the land that the company had sold in auction to a developer.

HTL, formerly Hindustan Teleprinters Ltd, had sold 11.02 acres land in Chennai for Rs 328 crore to the Bangalore-based developer RMZ in March 2007. The deal hit a stumbling block when the Tamil Nadu Government announced in March 2008 that it would buyback the land that it had allotted to Hindustan Teleprinters, at current market value. The Government also passed an order directing the Collector of Chennai to arrive at a market value for the land.

According to sources in the know, the Government has assessed the current market value at about Rs 20 crore an acre. This would be a steep drop when compared to the Rs 29.68 crore an acre that HTL had finalised with RMZ through an e-auction in which leading domestic and international developers had participated.

According to HTL, the company is awaiting a formal response from the Government on the land value and the decision.

The company has represented to the State Government the legal position and its right to sell the land. It was examining various options. RMZ has said that it would have to wait for HTL and the State Government to resolve the issue.

HTL is now a part of Himachal Futuristic Communications Ltd, which acquired a 74 per cent stake in 2001 in Hindustan Teleprinters, a Central Government undertaking. The Centre continues to hold a 26 per cent stake in the company.

HTL is a sick company and had planned to use the proceeds from the land sale for rehabilitation and revival.

The State Government assigned the land in Guindy, in south Chennai, in 1973 to Hindustan Teleprinters. According to HTL, the company (Hindustan Teleprinters) got a free hold title in 1993, when the Small Industries Development Corporation of Tamil Nadu, a State Government enterprise, executed a sale deed. The State Government’s stand is that the land was given for the company’s use and to create living quarters for its staff. The State Government continues to retain the right to take back the land if the company does not need it for industrial use.

RMZ had planned to set up a 1.6 million square feet project for IT companies and commercial use. Guindy is among the prime areas in Chennai where leading real estate developers and IT companies are taking up space.

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