Closure of EIL Asia Pacific Senderian Berhad (EILAP SDN BHD), a 100 percent subsidiary of Engineers India Limited (EIL)
No: ----- Dated: Dec, 10 2014
| Closure of EIL Asia Pacific Senderian Berhad (EILAP SDN BHD), a 100 percent subsidiary of Engineers India Limited (EIL) |
| The Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Shri Narendra Modi, has approved the proposal of the Ministry of Petroleum & Natural Gas to close Engineers India Limited (EIL) Asia Pacific Senderian Berhad (EILAP SDN BHD), a 100 percent subsidiary of Engineers India Limited (EIL). The closure will be as per Malaysian Laws with regard to winding up. Since the company is unable to secure any business from 2004 despite making efforts for it, the continued existence of EILAP shall not serve any purpose and its closure would obviate the avoidable recurring expenditure incurred for maintaining the company. Background: EILAP was formed in February, 1994 with the approval of the Cabinet Committee on Economic Affairs to harness the market potential in the oil and gas sector in Malaysia and neighboring countries. These countries were Indonesia, Thailand and Vietnam. EILAP has an Authorized Share Capital of RM one lakh divided into one lakh shares of RM 1 each. Initially, EILAP was able to get some business assignments. Subsequently, the situation in Malaysia changed with greater stress on local participation. As per the policy of the Malaysian Government, any foreign entity that desires to render service in the Malaysian oil and gas sector should either be licensed or registered with PETRONAS, a State owned company which control oils and gas activity in Malaysia. It also became binding for all such foreign companies to follow PETRONAS guidelines including the stringent guidelines on local (Bhumiputra) participation of minimum 51 percent at all levels, that is equity, Board of Directors, Management and employee level. This condition of local participation made it difficult for EILAP to survive and secure business in Malaysia. The Company did not get any assignments in and after 2004. In the changed scenario, the Board of EIL in its 304th meeting held on 24.1.2014, concluded that the continuation of EILAP is not a financially viable venture and recommended its closure. |