FIPB defers decision on Telenor stake

The Foreign Investment Promotion Board (FIPB) has deferred the decision of allowing Norwegian telecom firm Telenor to hike stake in its Indian telecom joint venture Unitech Wireless up to 74 per cent as the Ministry of Home Affairs has asked for more time to examine the deal.

The proposal had come up before FIPB, which clears all major foreign investment proposals in India, last month and a decision on allowing the investment into the company was deferred.

The applicant, Unitech Wireless, has sought permission to enhance foreign shareholding by Telenor Asia such that it may have direct and indirect foreign shareholding of up to 74 per cent.

Telenor has already completed the acquisition of 49 per cent stake in Unitech and to complete its deal for 67 per cent stake, the company requires FIPB approval.

A clearance from the FIPB is mandatory for Telenor’s investment in Unitech.

Sources suggested that the Home Ministry has sought more time to study the proposal.

The Department of Telecommunications has given their no-objection provided the credentials of the investors are verified by the Ministry of Home Affairs (MHA), including concern from their operations in Pakistan and Bangladesh.