CWC obtains corporate status to facilitate business transactions

Nearly seven decades after its inception, the center plans to transform the Central Warehousing Corporation (CWC) from a statutory corporation to a corporation through an amendment to the Warehousing Corporations Act and the introduction of a CWC (Transfer of Understanding) Act.

“Because CWC is already a premier Miniratna business and is a commercial organization, its continuation under the Warehousing Corporations Act only imposes restrictions that are a barrier to business expansion, a barrier to decision-making, and a constraint.” of competition with private players in this sector,” he told an official source.

He said the Department of Management for Food and Public Distribution held a stakeholder meeting last January, at which it was decided to move forward with the CWC transformation. In July 2021, the CWC board gave “approval in principle” to its conversion into a corporation.

Once CWC becomes a company under the Companies Act 2013, it could exercise the powers of the Miniratna and grow its business into a full logistics supply chain without red tape, he added.

CWC was established in 1957 for the storage of agricultural produce and certain other commodities, but requires prior approval from the central government before venturing into any other commercial activity.

The company operates 424 warehouses with an operating capacity of around 110,000 tons. In addition, the company holds 50 percent stakes in 19 state-owned storage companies that operate 2,190 warehouses with a total storage capacity of 502.6 lakh tons.

Once CWC becomes a corporation, it would have autonomy in making business decisions and would have the freedom to issue bonds or borrow money from commercial corporations. Currently, it must consult the RBI before seeking central government approval to raise funds.

By becoming a corporation, shareholders would be free to trade their shares at a fair price, giving the central government the opportunity to sell their equity. The center owns 55.02 percent of CWC while the State Bank of India owns 21.67 percent.

The transition would also allow CWC to sell, divest or lease its fixed assets and land that has been made available to CWC and its former subsidiary CRWC by state governments, railroads and ports for the construction of warehouses on preferential terms.

In June 2021, the cabinet approved the merger of state-owned Central Railside Warehouse Company Ltd (CRWC) with its holding company CWC in a slump sale for an undisclosed amount.

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