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SURAJEET DAS GUPTANew Delhi, 14 July

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mid talks of some foreign investorsabusing double taxation avoidancetreaties, the Foreign Investment Pro-

motion Board (FIPB) has rejected foreigndirect investment (FDI) proposals from firmsthat have not divulged details of beneficialownership or source of funding.

This is seen as a significant movebecause concerns were being raised, espe-cially by the Department of Revenue (DoR),that there was no clarity on the source offunds routed from certain countries suchas Mauritius with which India had dou-ble taxation avoidance agreements.

Besides, in many cases, even after FIPBsrecommendation for clearance, applicationshave been brought back to the table after

Finance Minister P Chidambarams direc-tion to the board that such details be sought.

As many as five applications came underscrutiny at the FIPB meeting last month. Ofthose, three from a Warburg Pincus groupcompany, insurance broking firm AllianceInsurance Brokers and Multi CommodityExchange (MCX) were rejected. The oth-

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Three FDI offers fail transpareFIPB rejects proposals from firms that have not divulged details of beneficial ownership

DEVILS IN THE DETAIL The 5 applications under scrutinyatthe FIPB meet

DEFERRED

1 Proposal fromSoma Tollways to

get investment via

Mauritius

2 Proposal fromScripbox.com India

to get investment

via Mauritius

1MCX sought post-facto approval to a2007 investment by AlexandraMauritius Ltd, a subsidiary of the

British Virgin Islands-based

Alexandra Global Master Fund

Issue: Applicant failed to explain thesource of funds and give details of

the holding company and its

Mauritius arm, besides the names of

principal shareholders and directors

2 Highdell Investment, Mauritius, partof the Warburg Pincus group, sought

approval to invest up to 100 per cent

in an Indian investee company

Issue: Beneficial ownership details withregard to 62.6% shareholding not

made available

3 Alliance Insurance Brokers soughtapproval for Mayfield FVCI Ltd,

Mauritius, to invest 25.1% in

early-stage companies in India

Issue: DoR objected, saying the firmhad not provided beneficiaries

details or explained

the availability

of funds

REJECTED