Investment Conditions

97. (1) The Investment Trust may invest in infrastructure projects or properties, as the case may be, through SPVs, subject to the following:- (a) no other shareholder or partner of the SPV shall exercise any rights that prevents the Investment Trust from complying with the regulatory requirements specified by Authority and recognised stock exchange(s), and an agreement has been entered into with such shareholders or partners to that effect prior to investment in the SPV: Provided that the shareholders' agreement or partnership agreement shall provide for an appropriate mechanism for resolution of disputes between the Investment Trust and the other shareholders or partners in the SPV: Provided further that the provisions specified by Authority and recognised stock exchange(s) shall prevail in case of inconsistencies between such agreement(s) and the obligations cast upon an Investment Trust by the Authority and recognised stock exchange(s). (b) in case the SPV is a company or LLP, the investment manager shall in consultation with the trustee appoint majority of the board of directors or governing board of such SPVs as applicable: Provided that in case of a REIT, the investment manager shall in consultation with the trustee, appoint at least such number of nominees on the board of directors or the governing board of such SPVs, which is in proportion to the shareholding or holding interest of the REIT in the SPV, as applicable; (c) the investment manager shall ensure that in every meeting, including annual general meeting of the SPV, the vote of the Investment Trust is exercised. (2) The Investment Trust may invest in infrastructure projects or properties, as the case may be, through holdco, subject to the following: (a) the ultimate holding interest of the Investment Trust in the underlying SPV(s) is not less than twenty-six per cent (26%); (b) no other shareholder or partner of the holdco or the SPV(s) shall exercise any rights that prevent the Investment Trust, the holdco or the SPV(s) from complying with the regulatory requirements specified by Authority and recognised stock exchange(s) and an agreement has been entered into with such shareholders or partners to that effect prior to investment in the holdco and/or SPVs: Provided that the shareholders' agreement or partnership agreement shall provide for an appropriate mechanism for resolution of disputes between the Investment Trust and the other shareholders or partners in the holdco and/or SPV; Provided further in case of inconsistencies between such agreement(s) and the obligations cast upon an Investment Trust by the Authority and recognised stock exchange, such obligations shall prevail; (c) the investment manager shall, in consultation with the Trustee, appoint the majority of the Board of directors or governing board of the holdco and SPV(s): Provided that in case of a REIT, the investment manager, in consultation with the trustee, shall appoint at least such number of nominees on the board of directors or the governing board of the holdco and/or the SPV, which are in proportion to the shareholding or holding interest of the REIT in the SPV; and (d) the investment manager shall ensure that in every meeting including, annual general meeting of the Holdco and SPV(s), the vote of the Investment Trust is exercised. (3) The investments by an Investment Trust may be in IFSC or India or in foreign jurisdiction: Provided that where an investment is made in a foreign infrastructure project or real estate asset, as the case may be, the investment manager shall ensure that such investment complies with all the applicable laws and requirements in such jurisdictions. (4) An Investment Trust shall hold completed and rent generating property or an infrastructure asset, as the case may be, for a period not less than three years from the date of purchase of such asset, directly or through holdco and/or SPV: Provided that this shall not apply to investment in securities of companies in infrastructure sector other than SPVs. (5) For any sale of property, whether by the Investment Trust or holdco or the SPV or for sale of shares or interest in the SPV by the holdco or Investment Trust exceeding ten per cent. (10%) of the value of Investment Trust assets in a financial year, the Investment manager shall obtain prior approval from the unit holders. (6) An Investment Trust shall not invest in units of other Investment Trust(s). (7) An Investment Trust shall not lend to any person other than the holdco or special purpose vehicle(s) in which the Investment Trust has invested: Explanation.- Investments in debt securities shall not be considered as lending.