Hilton Roulands Royalty Plan Shot Down

The Foreign Investment Promotion Board (FIPB) has rejected Hilton Roulunds Ltd's proposal to pay royalty to A/S Roulunds Fabriker, Denmark at the rate of three per cent on domestic sales and five per cent on exports, both net of taxes, on the sales of a range of poly-V belts, disc brake pads and commercial vehicle linings.

FIPB feels the payment is not appropriate as the proposal comes from a 100 per cent subsidiary and Roulunds Fabriker was one of the financial collaborators.

Roulunds Fabriker of Denmarkt holds 76 per cent equity stake in Hilton Roulunds, while Industrial-isation Funds for Developing Countries of Denmark 24 per cent.

 

Hilton Roulunds had applied to the government for permission to pay royalty to A/S Roulunds Fabriker of Denmark as the entire technology support for the companys poly-V belts and brake linings are being provided by the later.

Meanwhile, the Foreign Investment Promotion Board okayed Osram GmbH of Germany's proposal to manufacture incandescent lamps in the country during its last meeting.

The German company had been given government permission to set up a wholy owned subsidiary in the country for the manufacture of metal halide and high intensity discharge lamps, triphospher and energy efficient florescent tubes, automotive halogen and discharge lamps, photo-optics lamps for film, television, theatre and studio and other high-technology and innovative lamps for medical, germicidal, ultra-violet lamps for industrial applications.

Osram GmbH had said that demand for metal halide and energy effecient lamps in India in recent times had decreased.

Therefore it was necessary to reorient the company's product mix and begin producing incandescent lamps so that the investment (initial investment was to the tune of about DM 60 million) in India is speeded up.

Since the proposal related to a small change in the earlier venture which had been okayed by the Foreign Investment Promotion Board , the board passed it despite the fact there was no response from the administrative ministry.