Easier divestment norms may soon greet MNCs

In a move that could ease entry of foreign companies into India, the government may review the policy of imposing a disinvestment clause on foreign companies in key sectors such as petroleum, food processing and chemicals. The finance ministry is taking up the matter and will invite comments from various ministries before changing the policy.
The food processing ministry will comments on the recent issue of mandatory disinvestment in bottling operations for Pepsi. British Gas faced a similar problem but was later exempted from divestment from FIPB.
Pepsi had urged the Foreign Investment Promotion Board (DIPP) to waive off the mandatory divestment condition in the company’s bottling plants in India. The company has to shed 49% equity this year in Kools Drinks Beverages, a company it acquired in 2002. The company has bottling operations in Punjab, parts of Haryana as well as Himachal Pradesh. Pepsi had given an assurance to the government in 1997 that it would divest 49% in its bottling operations in 10 years. In 2002 the FIPB forced coca cola to divest 49% in its bottling operations despite repeated requests from the multinational. Coke referred to huge losses as the reason for not going in for an initial public offering (IPO) and finally opted for a private placement. Subsequently, the Atlanta-based Company bought back the shares from domestic investors.
Last month, the Foreign Investment Promotion board (FIPB) rejected a plea from Pharma major Colorcon to waive the mandatory dilution of its shareholding to 74% in its Indian venture. FIPB took a strong stand on Colorcon since the company was supposed to carry out the equity dilution by 2004. Though three years have gone by, no equity dilution has been carried out. Since the deadline has been missed, the board has decided to ask RBI to take action against the Pharma Company. Colorcon did not seek more time to comply with the condition.
Last year, in the case of British Gas, the FIPB had provided exemption from the mandatory divestment clause. The company was given the nod for holding a 50% equity in Mahanagar Gas (MGL) in December 2006.
The company had requested FIPB to grant a year’s extension for continuing with its existing equity stake of 50% in MGL. Even though the Petroleum Ministry did not support the extension of one year for continuing the foreign equity holding, the FIPB had approved the extension.
{The Economic Times, 1 August 2007}

कोई टिप्पणी नहीं:

Subject

Magazine

Adbusters
Advocate
Albion Monitor
Alternet
AJReview NewsLink
American NewSpeak
American Prospect
Atlantic Monthly
Bad Subjects
BeyondChron
Boston Review
Bulletin/Atomic Scientists
Business Ethics
Canadian Dimension
Catholic Worker
Center for Public Integrity
Change Links
City Limits
Clamor
Coffee Shop Times
Color Lines
Commonweal
Conscious Choice
Consortium
Consumer Reports
CorpWatch
CounterPunch
Covert Action
Critical Asian Studies
Dissent
Dollars & Sense
Doonesbury Daily
DoubleTake
E Magazine
Earth Island Journal
EarthLight
Eat The State!
Electronic Intifada
Extra!
Foreign Policy/In-Focus
Good Money
Governing
Grassroots Econ Organizing
Grist Magazine
Harpers
Heroine Magazine
High Country News
Hip Mama
HopeDance
Impact Press
In Motion
In the Fray
In These Times
Ironic Times
Justice Denied
LaborNotes
Left Business Observer
Media Alliance
MediaChannel.org
Metaphoria
Middle East Report
MonkeyFist Collective
Monthly Review
Mother Jones
Moving Ideas
Ms. Magazine
Multinational Monitor
Nation Magazine
National Catholic Reporter
National Parks Conservation
New Internationalist
New Labor Forum
New Left Review
New Politics
New Republic
New Rules Journal
Newswatch Project
Newsweek
New Yorker
New York Press
New York Review of Books
Non-Violent Activist
Northern Sky News
NOW Times
Ode
Off Our Backs
Onion.com
Orion Magazine
Peace Magazine
Peacework
Planet/Sierra Club
Political Sci Quarterly
Progressive Magazine
Progressive Populist
Progressive Response
Progressive Review
PR Watch
Public Eye Magazine
Rabble.ca
Rachel's Weekly
Ragged Edge
Red Pepper
Rethinking Marxism
Rethinking Schools
Salon
Satya
Scientific American
SF Bay Guardian
Shelterforce
SmokingGun.com
Social Policy
Sojourners
Stay Free!
Sun Magazine
Synthesis/Regeneration
Terrain
Texas Observer
This Magazine
Tikkun
Time
Timeline
TomPaine.com
Too Much
Toward Freedom
Utne Reader
Village Voice
War Times
Washington Monthly
Washington Spectator
WebActive
Wild Duck Review
WireTap
Wired Politics
Women's Int'l Perspective
Women's Review of Books
Work In Progress
World Policy Journal
World Watch Institute
Yes! Magazine
Yo! The Beat Within
Z Magazine