Cabinet may take final call on `control` definition this week
New Delhi: The government is likely to take a final call on the definition of "control" in mergers and acquisitions, especially those involving foreign companies, amid uncertainties over the Rs 2,058 crore Jet-Etihad deal.
"The Cabinet is likely to take up the issues related to definition of `control` on Wednesday or Thursday," a senior Commerce & Industry official said.
The Jet-Etihad deal, the largest in the Indian aviation sector that would see Abu Dhabi-based carrier buying 24 per cent in the domestic airlines, has hit regulatory hurdles mainly due to issues of "control and ownership" post the transaction.
According to the official, the new definition of "control" would be mostly in line with that proposed in the new Companies Bill.
As per the Companies Bill, which is awaiting Rajya Sabha approval, "control" shall include the right to appoint majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly. This right could be exercised by virtue of their shareholding or management rights or shareholders agreements or voting agreements or in any other manner.
Under FDI policy, `control` rests with the one who has the power to appoint majority of its directors in a company. The review of control definition comes against the backdrop of ambiguities in many deals such as Jet-Etihad that involves foreign entities.
Last month, the Foreign Investment Promotion Board (FIPB) had deferred a decision on Jet-Etihad proposal on grounds of `substantive ownership` and `effective control`.
More from India
More from World
More from Sports
More from Entertaiment
- Olympic medalist PV Sindhu returns to Hyderabad; receives grand welcome
- Twelve-year-old ISIS suicide bomber caught and arrested in Iraq
- Ganga river crosses danger mark in UP, Bihar and West Bengal
- NDMC issues notices to President's Estate for mosquito breeding
- DNA: Analysis of how Indian women's success in Olympics changed mindset of our society
- Volkswagen cuts 28,000 workers' hours over supply woes
- 1% TCS on cash buy not to apply on embassies, UN bodies, Govt depts
- Rio Olympics: Pele congratulates Brazil on football gold
- Handful of vested interests inciting trouble in Kashmir: J&K CM Mehbooba Mufti
- Performance issues led to my ouster as Flipkart CEO, says Sachin Bansal