The Hindu Business Line : DoT norms on foreign CEOs

In a bid to strike a middle path between the interest of the telecom operators and concerns raised by national security agencies, the Department of Telecom has proposed amendments to Press Note 5 (relating to FDI in telecom) that will allow foreigners to hold key posts such as CEO, Chairman and CFO in a company but with a rider that such appointments have to be cleared by the Ministry of Home Affairs on a yearly basis.

In a note prepared for the Cabinet, DoT has also said that the Chief Technical Officer and Chief Security Officer will have to be an Indian citizen. The Cabinet is likely to take up the issue in its next meeting.

The inter-ministerial group, which was set up by the Union Cabinet to iron out the differences between various ministries on increasing the FDI cap in telecom from 49 per cent to 74 per cent, has also decided to do away with the clause which makes it mandatory for the foreign partner to take the consent of the Indian partner before appointing a foreigner in key posts. The decisions will benefit Tata Teleservices as it has a foreigner as CEO, while it will have an adverse impact on Bharti as it has foreigner occupying the CTOs post.

The DoT note also said that while remote access will be permitted, operators will be asked to put technical devices in their network that will enable security agencies to monitor their network in India. Remote access will enable operators to monitor their network in India from a network access centre situated anywhere in the world.

The note has clarified that companies that fall in the Other Service Providers category will not be under the new norms. These include BPOs, ITeS, call centres, tele-marketing and tele-education providers. DoT said that since these companies would be using the infrastructure provided by telecom operators, who would anyways be within the purview of the Press Note 5, there was no need to separately enforce the norms on OSPs.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
DoT norms on foreign CEOs

Japan FIIs may pump in over $10 b next year

ONGC strikes gas reserve in KG basin block

HDFC fund to invest in hospitality sector

More leeway for banks in capital market exposure

New ID roll-out for investors

SEBI to launch new stock lending mechanism