Polaris completes divestment of its stake in IdenTrust

NEW DELHI: Polaris Financial Technology today said it has completed divestment of its 85.30 per cent stake in IdenTrust, which it had acquired for Rs 88.12 crore in 2011, as the US government wanted the company to be run by Americans.

"We have successfully completed the divestment of Polaris shares in IdenTrust, a US company," Polaris Financial Technology Group Chief Financial Officer Natarajan Narayanasamy said in a statement.

The company said the divestment was made in compliance with an order of November 2012 from the regulatory body CFIUS ( Committee on Foreign Investment in United States) directing it to divest its entire equity in IdenTrust Inc.

The regulatory body had said that as the business of IdenTrust was critical to the US, so the company must be controlled by Americans.

"...the company has received an order from CFIUS that the business of IdenTrust is critical to United States security infrastructure and therefore, ruled that the company must be controlled by a US management and imposed certain restriction on the operations of the company," Polaris has said in the annual report 2012-13.

On April 27, 2011, it acquired 85.30 per cent equity stake in IdenTrust Inc, engaged in trusted identity solutions and digital identity authentication services based in the US.

"The total consideration for the acquisition is Rs 8,812.50 lakh. The company has also advanced loans aggregating to Rs 217.16 lakhs to the subsidiary," the annual report said.

The company, however, did not share the amount it has received for selling the stake.

Asked about the impact of the deal, Narayanasamy said the company is likely to see a positive impact in its quarterly profit.

"In terms of impact of the deal, depending on the exchange rate prevailing at the time when the consideration will get credited to our account, we are likely to see a neutral to nominal positive movement in our quarterly PAT," he added.