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Telcos can bring in NRIs for top jobs
An amendment to this effect has been made in the notification that is likely to be placed before the Cabinet soon.
Indian telecom companies will soon have non-resident Indians and expats as chairmen, managing directors and chief executive officers (CEOs) and also as directors on the board.
An amendment to this effect has been made in the notification that is likely to be placed before the Cabinet next week.
Industry observers say that there has been a consistent demand for this change from telecom companies with strategic foreign investment.
The front-runners who could bring in Indian expats as chief executive officers are Bharti-Televentures Ltd, in which Vodafone holds 10 per cent; Hutch; and the Tatas, who could bring in Darryl Greene, currently CEO of Tata Teleservice.
This is an important change in the FDI proposal for telecom sector approved by the Cabinet in November last year.
The Cabinet had said that the majority of the directors on the board including chairman, managing director and the CEO should be resident Indian citizens.
The Department of Telecommunications (DoT) will enforce the above and the conditions. Sources said, “We have decided to bring the change based on the consultation with the Commerce Ministry. It would be placed for Cabinet approval by the month-end and is likely to be notified by the next month.”
Sources said that during the last few meetings on FDI, the officials from Commerce and Finance Ministry had discussed whether a disparity should be maintained between the telecom companies with 49 per cent FDI and those with 74 per cent.
“The issue has been sorted out. All the inputs that we have incorporated would be reflected in the notification with amendments. The amendments have been made in conformity with all the security and legal parameters and no compromise has been made,” sources added.
Last November, the government had enhanced the FDI ceiling from 49 per cent to 74 per cent in certain telecom services such as basic, cellular, unified access services, national/international long distance, V-Sat, PMRTS, global mobile personal communications services (GMPCS) and other value-added services. The government’s decision had the blessings of its Left allies. But that was on the condition that management and the person heading a company with 74 per cent FDI would be of Indian origin.
The Left parties had objected that without this condition, the security of the country would be compromised.
A telecom analyst said, “I do not think the nationality of the CEO or the senior manager in a telecom company with 74 FDI is relevant for security-related issues.”
The government had clarified that the appointment to the key positions in the telecom companies with 74 per cent FDI would be made in consultation with serious Indian investors.
