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FIPB clears 34 FDI proposals

The Foreign Investment Promotion Board today cleared 34 proposals involving Foreign Direct Investment inflow of Rs five billion, including nine applications involving the information and broadcasting ministry.

The board, however, rejected the application from the US-based General Motors Corporation seeking royalty from its wholly-owned subsidiary in India -- General Motors India Limited, FIPB sources said.

''The application was rejected on the grounds that foreign companies cannot seek royalty from 100 per cent subsidiaries.''

Meanwhile, GMI sources said the parent company had sought restoration of the royalty that was being paid to it by the Indian joint venture prior to its conversion into a wholly-owned subsidiary. They declined to state the amount of royalty being charged.

Prominent among the I and B proposals cleared today were applications by Walt Disney India Limited, Sony pictures and Bloomberg.

Walt Disney has been allowed to expand activities in India by setting up a 51-49 joint venture in India with the majority control resting with the US-based firm. The firm is to be involved in production of toys, video films and animated films. The venture's activities will not include broadcasting.

Sony has been allowed to set up a wholly-owned subsidiary here for producing and exporting commercial and feature films from India. Meanwhile, Bloomberg News Agency, that is already operating in India, has been allowed to collect information from official sources in India and pass them on to the parent company in United States, which would then disseminate the information.

In all, the nine I and B proposals were worth an FDI inflow of Rs 180 million.

The other I and B proposals cleared during the day included applications by R K Swamy, Zen, Optima, Mudra and Chaitra. Publicis Worldwide BV of Netherlands will hold a 60 per cent stake in Zen while the Kadar Group Beheer BV will have the controlling 51 per cent in Optima.

Vertigo Asia of Hong Kong has been allowed to pick up 49 per cent in Mudra and Leo Burnett up to 74 per cent in Chaitra. R K Swamy had sought permission to enlarge activity in the country.

Meanwhile, the application of if production for producing commercials and television serials was rejected as the capitalisation was very low at Rs 700,000.

The board today also permitted the Royal Dutch Shell group to set up a wholly owned subsidiary to manufacture photovoltaic cells for non-conventional energy systems. The project will involve a FDI inflow of Rs 100 million.

Meanwhile, Powergen has been allowed to buy out Torrent group's 46.34 per cent stake in Gujarat Torrent by bringing in Rs 3 billion. Powergen UK already has 27.77 per cent stake in the company. The fresh acquisition would be done by Torrent India, a wholly-owned subsidiary of the Torrent group.

Marubeni Construction has also been allowed to hike equity in its venture from five million dollars to 15 million dollars.

Hoechst Schering Agroevo S A of France has been permitted to set up a joint venture in India with the MIL group for agrochemical activities. Hoechst is to be bringing in Rs 5.1 million to pick up a 51 per cent stake in the venture. Another proposal by Hoechst to acquire shares in Indian companies was not taken up today since the documentation for the same was not complete, FIPB sources said.

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