The Foreign Investment Promotion Board (FIPB) is understood to have asked the Ministry of Home Affairs (MHA) to complete its inquiry with regard to a proposal by Norwegian telecom firm Telenor for increasing stake in Indian telecom joint venture Unitech Wireless.
The proposal had come up before FIPB, which clears all major foreign investment proposals in India, during its meeting on July 24. A decision on allowing the investment into the company was deferred for the fourth time as the Ministry of Home Affairs has asked for more time to examine the deal.
According to sources, the board has noted that “...MHA has not completed this enquiry even after four months from the date of receipt of the proposal and such delays defeat the time-frame laid down by FIPB. It directed that the MHA must complete its clearance without further loss of time.”
The applicant, Unitech Wireless, has sought permission to enhance foreign shareholding by Telenor Asia, so it may have a direct and indirect foreign shareholding of up to 74 per cent. The proposal for the first time was discussed in the FIPB meeting on May 22, 2009.
Telenor has acquired 49 per cent stake in Unitech Wireless. The company requires FIPB approval to raise its stake to 67 per cent in the company.
The Department of Telecommunications has given its no-objection, provided the credentials of the investors are verified by the Ministry of Home Affairs, including concern from their operations in Pakistan and Bangladesh.
