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department of industrial policy and promotion (DIPP),
the administrative department for FDI policies is
scheduled to take a proposal to the Foreign Investment
Promotion Board’s (FIPB) core group.The rationale
behind the proposal is presumably that 76% FDI is
as good as 100% FDI.
From the investor’s point of view, this affects
his rights as far as his control over the company
is concerned, while for the government– this
would allow it to impose the disclosure obligations
on the company. Currently, disclosure obligations
are virtually non-applicable for 100% FDI entities,
which are wholly owed subsidiaries of foreign companies.
Another section of policymakers believe that the
public would be able to partake in the ‘prosperity’
of the FDI entity, if the condition of compulsory
24% public float of equity is stipulated.
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