Norwegian telecom major Telenor
is looking forward to new telecom partner in India.
However, till now Telenor has not disclosed the name of its potential
partner(s), directors, key personnel, etc. Even in its application to
Foreign Investment Promotion Board (FIPB), Telenor has not disclosed
the name of its partners and other crucial details.
As a result the Home
Ministry blocked Telenor’s security clearance before FIPB.
Further, it is also clear that the Foreign
Investment Promotion Board (FIPB) under the FDI Policy of India 2012
is required to consider many factors before any approval is granted
in this regard. Telenor application is not satisfying those
conditions and criteria.
Under the consolidated
FDI policy of India 2012 by DIPP, there is a set
procedure
to allow FDI
in telecom services, ISPs and telecom infrastructure providing
sectors of India. Among other, the FDI
in telecom sector of India and national security issues
are of primary importance.
For instance, while approving the
investment
proposals, FIPB shall take note that investment is not coming from
countries of concern and/or unfriendly entities. Further, telecom
service providers, ISPs and telecom infrastructure providers must
comply with licensing and security requirements notified by the
Department of Telecommunications for all services in order to make
FDI in India.
The Chief Officer In-charge of
technical network
operations and the Chief Security Officer should be a resident Indian
citizen. The officers/officials of the licensee companies dealing
with the lawful interception of messages will be resident Indian
citizens. The majority Directors on the Board of the company shall be
Indian citizens. FDI shall be subject to laws
of India and not the laws of the foreign
country/countries.
The positions of the Chairman, Managing
Director,
Chief Executive Officer (CEO) and/or Chief Financial Officer (CFO),
if held by foreign nationals, would require to be security vetted by
Ministry of Home Affairs (MHA). Security vetting shall be required
periodically on yearly basis. In case something adverse is found
during the security vetting, the direction of MHA shall be binding on
the licensee.
It seems Telenor failed to satisfy many
of these
requirements. As a result, its application to establish a new joint
venture was rejected by FIPB labeling it as pre mature. FIPB believes
that the said proposal is pre-mature as crucial details pertaining to
the investee company; specific Telenor entity through which FDI would
be routed; details of the Indian partner; the quantum of FDI
envisaged, etc are missing. FIPB would not process the application
till all missing information and details are provided by Telenor.
