Dubai developer Emaar Properties will be “reorganising” its India unit Emaar MGF Land Limited via a demerger from the 11-year-old joint venture, the company announced on Wednesday.
“In order to lend greater focus on its Indian operations and for the purpose of developing the potential for further growth and expansion of the business, Emaar Properties agreed to take steps for the reorganisation of Emaar MGF Land Limited by way of scheme of arrangement (demerger),” it said in a statement.
“This reorganisation will enable Emaar to implement focused strategy for its real estate business in India… It will also enable Emaar to drive the development of ongoing projects in India,” the statement added.
The company also confirmed that the demerger will not have any financial impact on the company.
“We will announce more details on it in due course, a spokesperson said.
The move comes after rumours had emerged last year that Emaar was close to ending its joint venture with Indian firm MGF Developments.
However, Emaar had dismissed the report at the time saying: “We would like to clarify that India is a key market for Emaar and we are committed to the success of our projects in India through our company, Emaar MGF Land Ltd.”
Emaar MGF, which began operations in India in 2005, has developed residential, commercial and hotel projects.
However, the company ran foul of government rules in 2013, when the Indian government alleged that Emaar MGF had violated foreign exchange rules with investments worth 86 billion rupees ($1.51bn) over the previous eight years.
The Ministry of Finance claimed the company broke the central bank’s foreign investment rules by using foreign funds to buy farmland since April 2005.
Source : Gulf News