The Hindu Business Line : Jaipur IPL Cricket’s FDI proposal turned down

New Delhi, Nov. 17 The Government has rejected a proposal by Jaipur IPL Cricket (Mumbai) – the owners of the ‘Rajasthan Royals’ Indian Premier League cricket team – for inducting 100 per cent foreign equity capital worth over $5.82 million.

An official statement said that the FDI application pertained to induction of “100 per cent foreign equity by way of issue of shares for consideration other than cash flow.”

Sources said that Jaipur IPL Cricket had approached the Foreign Investment Promotion Board (FIPB) for permission for 100 per cent foreign equity of $5.8 million by way of issue of shares to the UK-based EMIPL (in lieu of earnest money paid by it to Board for Control of Cricket in India) and MHC, Mauritius (against franchisee fee paid by MHC to BCCI on behalf of JIPL).

The proposal did not entail physical flow of FDI into the country.

JIPL, which is a wholly-owned subsidiary of MHC, was incorporated in March 2008 for managing and operating the Rajasthan Royals team. MHC, in turn, is a venture between EMIPL, Tresco International Ltd, Blue Water Estate Ltd and Kuki Investments Ltd.

17 FDI proposals cleared

The Finance Ministry felt that the company should explain the justification of direct payments being made even before Jaipur IPL was created.

The Government has, meanwhile, approved 17 FDI proposals amounting to Rs 1,159 crore. Amongst them is NRI-billionaire Lakshmi Mittal-led ArcelorMittal’s Rs 503 crore foreign direct investment proposal entailing acquisition of 37.5 per cent stake in Uttam Galva Steels Ltd, which is engaged in manufacture of semi-finished iron and steel products in cold rolling mills.

The Government has also referred the proposals of Jet Airways to bring in Rs 2,000 crore FDI and the Mauritius-based investment fund Indium IV to bring in Rs 2,500 crore, to the Cabinet Committee on Economic Affairs (CCEA) as the proposals are of value above Rs 600 crore.

Deferred/rejected

Decisions on 12 FDI proposals have been deferred – this includes PepsiCo India’s proposal for foreign investment of $200 million as equity (this will take the total investment by the firm to $655 million).

Five proposals have been turned down by the Government.

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