A cabinet note on revision of three norms for the proposed 74 per cent foreign direct investment in telecom services has rejected requests to appoint only Indian citizens as majority directors on the board “with the approval of serious Indian promoters”. Instead, it states that such appointments should be as per the Companies Act, providing due rights to all shareholders. The Department of Telecommunications (DoT) has also dropped its proposal to treat resident persons of Indian origin at par with Indian citizens after the finance ministry rejected the idea.
According to the note, the total holding of Indian banks and financial institutions (only PSUs) will be treated as Indian holdings. DoT has said that such shareholding accounts for less than 2 per cent of most operators. Companies are also required to disclose and certify that the foreign shareholdings are within the 74 per cent limit every six months.
