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June 14, 2001
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Money > Business Headlines > Report June 14, 2001 |
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VST stake: BAT must get ITC go-ahead, says govtPartha Ghosh British American Tobacco's (BAT) attempt to increase its stake in VST Ltd may come a cropper, with commerce and industry minister Murasoli Maran on Wednesday saying that any fresh FDI proposal in the tobacco sector will be considered strictly under the provisions of the existing guidelines. "So far, I am not aware of any proposal from BAT. If it applies, we will have to go strictly by the existing policy guidelines," the minister told Business Standard. Government officials explained that BAT will require a no objection certificate from ITC since it holds a stake in the Indian company. They also pointed out that during Maran's previous stint as industry minister in the United Front government, BAT had failed in its attempt to increase its holding in VST or ITC. "But first, we already have a policy of not entertaining any fresh foreign investment in the sector. That is the minister's commitment to Parliament," they added. Maran's statement holds significance since ITC has already made it clear that it will not give BAT the much required NoC if it makes any attempt to increase its shareholding in the Hyderabad based company. The previous 13-month old Vajpayee government had permitted 100 per cent FDI in the tobacco sector. But Maran, who became the commerce and industry minister in the NDA government, subsequently told Parliament that his ministry would not take up for consideration any proposal relating to fresh FDI infusion in the sector owing to opposition from several quarters. Since then, an industry ministry official added, the policy allowing 100 per cent FDI in the tobacco sector was rescinded. The government is now guided by the commitment the minister gave to Parliament.
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