[dropcap color=”#008040″ boxed=”yes” boxed_radius=”8px” class=”” id=””]D[/dropcap]etails provided by the former Finance Minister Palaniappan Chidambaram about the 5 departments related to Foreign Investment Proposals Board (FIPB) approving Aircel Maxis investment in his statement released to the Press have been shown to be lies. The clearance by FIPB was subject to conditions. Chidambaram could not approve Aircel Maxis without checking conditions met as per Press Note 5 of 2005 and Foreign Direct Investment (FDI) Rules. Below is the Press Release by Chidambaram:
The Press Release makes it sound as if the Aircel-Maxis deal was just another day at the office, a routine affair. This flies in the face of the response received by Senior BJP leader Subramanian Swamy to a Right To Information (RTI) request on “whether FIPB approval was obtained in the Aircel-Maxis deal”. The response from the Department of Economic Affairs detailing the minutes of the meeting that took place on this matter have been released and a copy of the same is shown below:
The approvals were subject to the licensing conditions of Department of Telecommunications and guidelines notified in the Press Note No. 5 of 2005. This detailed Press Notification can be accessed here. From this notification, Clause 1-D is reproduced below:
FDI upto 49 per cent will continue to be on automatic route. Foreign
Investment Promotion Board (FIPB) approval shall be required for FDI in the
licensee company/Indian promoters/investment companies including their
holding companies if it has a bearing on the overall ceiling of 74 per cent.
While approving the investment proposals, FIPB shall take note that
investment is not coming from unfriendly countries.
The last line in the clause above bears careful reading… Saudi Telecom has a 25% stake in Maxis as well as in several telecommunication companies in Pakistan, which means that the Maxis acquisition would have been scrutinized closely. The other glaring factor is that Foreign companies could only own 74% of Indian Telecom companies, yet Maxis ended up owning almost 99%!
The Aircel-Maxis case, currently in the Supreme Court has just got more interesting!
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