The Centre has given its approval for Janalakshmi Financial Services Ltd’s share swap proposal involving its non-resident shareholders. It has, however, rejected Sistema Shyam Teleservice Ltd’s proposal to raise foreign shareholding in its downstream company to 100 per cent.

Decision on foreign direct investment (FDI) proposals made by five entities namely Morgan Stanley India, Quintillion Business Media, Delbert Winn, Tikona Digital Networks and Netmagic Solutions were deferred by the government, according to an official release circulated on Thursday.

The decision by the Finance Ministry is in line with the recommendations of the Foreign Investment Promotion Board (FIPB) made at its meeting last month.

Apart from Sistema Shyam Teleservices, proposals of three others namely Mouth Kailash Shipping, Rev India and G4S Cash Solutions were rejected.

Janalakshmi Financial Services (JFS), a non-banking financial company, had sought an approval for share swap whereby the non-resident shareholders of Janalakshmi will be issued shares in Jana Capital Ltd (JCL) in lieu of JFS shares being issued to JCL. The proposal, which did not include an infusion of fresh FDI, was approved by the government.

SSTL's proposal to exit the resident shareholders and transfer their holdings to the existing foreign shareholders, Sistema Joint Stock Financial Corporation, Russia and Federal Agency for the State Property Management (Rosimushchestvo), was rejected by the government.

The proposal, if approved, would have increased the foreign shareholding in the company from 73.95 per cent to 100 per cent and consequently increased the foreign shareholding in SSTL’s downstream company, Shyam Internet Services Ltd, to 100 per cent.

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