The Hindu Business Line : FIPB clears way for Guardian Ind's 100 pc arm

In what could be among the first few instances of the Foreign Investment Promotion Board (FIPB) ruling in favour of the foreign partner in matters attracting Press Note 1 of 2005, the board has given its nod to Guardian Industries to set up a wholly owned subsidiary in India.

The US-based glass manufacturer's Indian joint venture partner Modi Rubber, which owns 21 per cent stake in float glass manufacturer Gujarat Guardian Ltd, had refused to grant a no-objection certificate to Guardian (which owns 50 per cent in the joint venture) for setting up a separate subsidiary.

The FIPB had, subsequently, called on both Modi Rubber and Guardian to present their arguments explaining their position.

Modi Rubber had reasoned that this case attracted Press Note 1 as the new venture is in the same field and the existing joint venture was not sick or defunct.

Guardian, in turn, had explained that it would not hurt the interests of Gujarat Guardian Ltd, as it held a substantial 50 per cent stake in the venture.

It further said that the new plant would be at a location other than the GGL plant and that almost 70 per cent of the new plant production will consist of new products not made by GGL.

The board, subsequently, gave its nod for the new venture, which would bring in an investment of approximately $66.67 million, stating that it was unlikely to jeopardise the interests of the existing venture.