DHI to take land ownership of its companies

A land policy has been framed to safeguard land against privatisation

Resources: The Druk Holding and Investments (DHI) will be transferring the ownership of some hundreds of acres of land that are with the DHI owned companies, to ensure that the land remains as state property for all times to come.

DHI’s officiating Chief Executive Officer, (Dr) Damber S Kharka said that depending on the structure of the economy, market phenomenon and government policies, the share holding pattern of the DHI owned companies might change.

But DHI is solely state owned and whatever asset DHI has is in turn a state property.

For instance, if shares of a fully DHI owned company are divested to public, then all the company’s assets would also be divested to its shareholders. This means, its shareholders would eventually own the company’s land, which is actually state land. “This is not in national interest,” (Dr)Damber S Kharka said.

To this effect, DHI has come up with a land policy, which the Land Commission Secretariat approved in principle.

However, DHI is discussing the implementation modality with its companies.

If the companies have already mortgaged their land, they would have to obtain no objection certificate from the lender before transferring the ownership. The companies can also transfer the ownership after fulfilling its terms and conditions for mortgaging the land.

In case the company wants to acquire new land, the DHI would apply for lease from the government or private individual after the board’s approval.

“When all the land are consolidated in one place, it is always a gain because it can be used elsewhere,” (Dr) Damber S Kharka said. “It would also form a huge asset base which can facilitate raising and leveraging finance.”

While some critics feel that DHI is asserting more authority over its companies, officials from the DHI said this was to consolidate national property and safeguarding it against privatisation.

The Constitution also mandates the state to promote an open and progressive economy, and foster private sector development through fair market competition and prevent monopolies.

The public finance Act allows the government to establish state enterprise to undertake commercial activities, which are not catered for by the private sector. Once there are enough manufacturers and providers of same goods and services in the market, the Act prescribes that the particular state enterprise be dissolved or privatised by divesting the government’s shares.

Tshering Dorji

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