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Jul 22, 2013, 01.06 PM IST | Source: CNBC-TV18

Govt reaches consensus on new definition of 'control': Srcs

The Department of Industrial Policy and Promotion, which has sought comments on the definition of control in the context of FDI deals, is awaiting the views of the Corporate Affairs Ministry on the issue.

The inter-ministerial group has reached a consensus on new definition of "control", CNBC-TV18's Rituparna Bhuyan reports.

The Department of Industrial Policy and Promotion, which has sought comments on the definition of control in the context of FDI deals, is awaiting the views of the Corporate Affairs Ministry on the issue.

Currently, ambiguity persists over the definition of "ownership and control," especially with regard to transactions involving foreign direct investment.

The Rs 2,058 crore deal struck by Jet Airways to sell a 24 per cent stake in the airline to Abu Dhabi's Etihad Airways is facing regulatory hurdles, while final approval from the Foreign Investment Promotion Board is on hold, pending more clarity on control and ownership of the Indian carrier.

According to the new proposal, control is defined as "the ability to appoint majority directors and control management/policy decisions" of a company. Control has been also defined by the virtue of shareholding and management rights.

Sources say the Law Ministry and Department of Economic Affairs (DEA)concur with the new definition of control. The Cabinet is likely to take up the new control definition this week.

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