KOCHI: A legal tussle has broken out between the management of SmartCity (Kochi) Infrastructure (SCKI), which runs an IT park in Kakkanad here, and some of its investors after the management refused to waive three months’ rent (April-June), thereby going against Chief Minister Pinarayi Vijayan’s assurance.
A group of IT companies moved the High Court against the stand adopted by SCKI, a joint venture between Dubai Holding (84%) and the Kerala government (16%).“SCKI is not a government firm and the park is not a government IT park,” the firm told TNIE.However, investors have objected to the company’s claim.“How can a company that has the CM as chairman and receives huge subsidies from the state government claim to be a private enterprise?” asked one of the petitioners.
“The claim that SCKI is a private entity and not liable to follow any government directives is false and is being made with the ulterior motive to collect rent for the lockdown period,” said an investor, who did not wish to be named.Another investor said besides paying an initial amount as land value to the government on a lease of 99 years, SCKI pays just `1 per acre annually as rent for the 246 acres of land. “The joint venture was signed as per a Framework Agreement signed in 2007. It says the Special Purpose Vehicle and any IT company operating from SmartCity Kochi shall be entitled to privileges, subsidies and concessions as may be applicable or extended to such companies under the IT policies of the government from time to time,” one of the investors told TNIE over the phone from Dubai.
In a written response, SCKI said it had offered rent deferment options to all the occupants who requested support “in these unprecedented times”. “A small fraction of tenants chose not to avail the deferment and instead approached the state government seeking extension of its order,” it said.
The state government had waived rent for all companies (upto 10,000 sqft) operating from its IT parks for three months. The investors said Dubai Holding, owned by the government of Dubai, had also announced rent waivers in Dubai for its tenants in projects there.“Hence the stance taken by SCKI and CEO Manoj Nair are against the ethos and principles of shareholders,” said an investor.
The big question before the court is whether the Covid-19 outbreak and lockdown amount to force majeure. “Given the unprecedented nature of the pandemic and actions of governments around the world in response, it is likely it would constitute a force majeure event,” said an investor.