• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

New Delhi, June 6 The Foreign Investment Promotion Board has rejected Federal Mogul Corporation’s proposal to set up a new subsidiary to manufacture and sell sealing products and gaskets, following objection by Talbros Automotive Components (TACL) that such plans violated a technical agreement between the two entities, and that it would “jeopardise” its business.

Federal Mogul, a global supplier of automotive components and other engineering products, had sought Government approval to set-up a new wholly owned subsidiary with foreign equity of 100 per cent, entailing an investment of Rs 42-63 crore over a three-year period.

TACL has a technical assistance agreement with Federal Mogul’s affiliate company Federal Mogul Sealing Systems, UK under which TACL obtained a non-exclusive licence from the latter on know-how pertaining to manufacture of non-asbestos gaskets in India. The agreement was inked in 2003.

Sources said that appearing before the FIPB to substantiate its claim, TACL pointed out that it had no issues about Federal Mogul manufacturing products other than gaskets in India. Citing Press Note 1, the company further said that Federal Mogul’s subsidiary company would severely impact the operations of TACL.

Contesting these claims, Federal Mogul said that it did not have any existing equity stake in TACL. It also said that since the agreement being cited by the latter was non-exclusive, it entitled Federal Mogul to grant further licences to any entity in India. It also contested Talbros’ claim that a NOC in Section 9.6 of the agreement allowed Federal Mogul to conduct any business in India, except gaskets.

Federal Mogul officials were not available for comments. Talbros officials also declined to discuss the issue. However, a company source confirmed that Talbros had objected to the plans of its technical partner, citing commercial interest.

More Stories on : Corporate Disputes | Automobile Components

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Fire at Reliance petrochem unit kills 3; production not disrupted

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line