Financial Daily from THE HINDU group of publications
Wednesday, Jun 23, 2004
Financial Daily from THE HINDU group of publications Wednesday, Jun 23, 2004 |
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Corporate
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Mergers & Acquisitions DHL set to acquire 100 pc stake in Indian operations
Ambarish Mukherjee
New Delhi , June 22 THE Foreign Investment Promotion Board (FIPB) has allowed Dutch major DHL Worldwide Express BV to convert its Indian operations into a wholly-owned subsidiary, despite strong opposition from the Department of Posts. However, it has imposed a condition on the Dutch company, as per which the sale proceeds of the 53,000 shares held by an NRI will have to be remitted to an NRO (Non-Resident Ordinary) account in India. DHL Worldwide Express BV had sought the board's permission to acquire the remaining 2.6 per cent stake in terms of 74,250 equity shares of Rs 10 each in its Indian operations and thus get 100 per cent control of DHL Worldwide Express India. Besides acquiring the remaining 2.6 per cent stake in DHL Worldwide India, the Dutch parent has also said that it will transfer one share out of the acquired 74,250 shares to its nominee, Deutsche Post International BV, "to meet the requirement of the provisions of the Companies Act, 1956", according to sources. Deutsche Post International will acquire one single share in the restructured Indian operations of DHL since, through a complicated holding structure, DHL Worldwide Express BV is one of its subsidiaries. The Department of Posts, while raising objections to the proposal, had said: "The very fact that such investments in the courier industry are subject to FIPB approval indicates that each proposal for foreign investment in such sectors should be examined with reference to the interests of the country." Besides, the department said, DHL was allowed to operate in the country when it was "not a part and parcel of Deutsche Post" and with the planned transfer of Indian shares, Deutsche Post would be the owner of more than 97 per cent equity in DHL India. "DHL has not intimated the Government of India of the change in its ownership for reasons that are not clear," it added, while substantiating its objections to DHL's proposal.
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