Financial Daily from THE HINDU group of publications
Friday, Feb 21, 2003
Financial Daily from THE HINDU group of publications Friday, Feb 21, 2003 |
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Info-Tech
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Buyback Huawei Tech buy-back stalled — No policy as yet on Chinese investments, says FIPB K. Giriprakash
BANGALORE, Feb. 20 THE China-based Huawei Tech Investment, the holding company of Bangalore-based Huawei Technologies, has run into problems over its plan to buy back shares from another Indian subsidiary. The Foreign Investment Promotion Board (FIPB) recently deferred decision on an application from the Hong Kong-based Huawei Tech Investment Company for lack of a comprehensive policy on Chinese investments in India. During a meeting, an External Affairs Ministry representative informed the board that a comprehensive policy was being formulated on investments by Chinese nationals in India. Hence, a decision on the issue had been deferred, according to the minutes of the FIPB meeting. Huawei Tech Investment had sought transfer of a total of 10,000 shares from Mr S.K. Kapoor and Ms Vinita Gurung who together hold around four per cent of the total shares in Huawei Telecommunications (India) Company Private Ltd. With the transfer of these shares, Huawei Telecommunications based in Delhi would become a wholly-owned subsidiary of Huawei Tech Investment. Currently, Huawei Tech Investment holds 2,59,528 shares of Rs 10 each, while the rest are with Mr Kapoor and Ms Gurung. The promoters plan to pump in around Rs 40 crore over a period of three years. The company has already invested around Rs 7.5 crore in Huawei Telecommunications. Huawei Tech Investment had faced similar problems when it had set up Huawei Technologies in Bangalore, a wholly-owned subsidiary of the company, in 2000 to carry out software and R&D operations. The Ministry of External Affairs had raised certain objections on this investment at that time. Huawei Telecommunications was set up in July 2002 to undertake manufacture and marketing of telecom products. An earlier application from Huawei Tech Investment had been deferred on an objection filed by the Department of Telecommunications, which stated that the company was engaged in trading activity without necessary approval. The Bangalore-based Huawei Technologies was last year accused of supplying software to the Taliban group, but was later cleared of the charges by the Ministry of External Affairs. The Chinese company is planning to double investment to around $30 million in manpower, technology and infrastructure in another couple of years.
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