Financial Daily from THE HINDU group of publications
Saturday, Jul 31, 2004
Financial Daily from THE HINDU group of publications Saturday, Jul 31, 2004 |
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Info-Tech
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Telecommunications Industry & Economy - Foreign Direct Investment Decision on Max India foreign equity on hold
Thomas K. Thomas
New Delhi , July 30 THE Foreign Investment Promotion Board has deferred a decision on the proposal from Max India Ltd to increase foreign investment in the company from 14 per cent to 59.7 per cent following objections raised by the Department of Telecom. As per Max India's proposal two Mauritius-based investment firms, Parkville Holding Ltd and Ensley Ltd, would pick up 49.17 per cent in the company. Max India has subsidiaries in the areas of plastic, healthcare service, information technology, life insurance and telecom. The Department of Economic Affairs (DEA) has also informed FIPB that it would take up the issue with the Department of Legal Affairs and revert. The insurance division of the DEA would also have to consult the Insurance Regulatory Authority of India on the implication of the FDI hike in the company since Max India has an insurance subsidiary - Max New York Life Insurance Co. The insurance division has said that as per the IRDA Act, no Indian insurance company can have the aggregate foreign equity shares exceeding 26 per cent of the equity capital. However, the primary objection came from the DoT which has said that since Max India has investments in companies operating telecom services where foreign direct investment has been capped at 49 per cent, the proposal could not be given approval. "As per present policy, Max India cannot have more than 49 per cent foreign equity as it is a holding company for Comsat Max Ltd, a VSAT service provider, and is also a holding company of Max Telecom Ventures Ltd. Therefore, DoT does not support the present proposal of allowing foreign equity of 59.77 per cent in Max India Ltd," a senior DoT official said.
More Stories on : Telecommunications | Foreign Direct Investment
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