Government has put in place stricter norms for appointment of people from sure nations, together with China, as administrators on the boards of Indian corporations, by making safety clearance necessary for such people.
In current weeks, the company affairs ministry has made varied amendments to guidelines when it comes to applicability for corporations and people from nations that share land borders with India.
Putting in place a stricter framework, the ministry has now mandated safety clearance for people from nations sharing land borders with India to be appointed as administrators on the boards of Indian corporations.
Amendments have been made in guidelines pertaining to appointment and qualification of administrators underneath the Companies Act, 2013.
“… In case the person seeking appointment is a national of a country which shares a land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall also be attached along with the consent,” the notification, dated June 1, stated.
Besides, for such individuals, the applying quantity won’t be generated once they apply for the Director Identification Number (DIN) except the applying is submitted together with vital safety clearance from the house ministry, as per the notification.
The newest transfer comes after the ministry, on May 20, made declaration in reference to FEMA necessary for entities from such nations concerned in amalgamations with Indian corporations.
In this regard, the foundations governing compromises, preparations and amalgamations had been amended.
On May 5, the ministry amended guidelines governing corporations with respect to prior approval being necessary for investments by entities and people from nations that share a land border with India.
Amendments had been made with respect to guidelines for the prospectus and allotment of securities.
In April 2020, the Department for Promotion of Industry and Internal Trade (DPIIT) had issued Press Note 3 relating to international investments.
With the press observe, the Government had made its prior approval necessary for international investments from nations that share land border with India to curb opportunistic takeovers of home corporations following the coronavirus pandemic.
Countries which share land borders with India are China, Bangladesh, Pakistan, Bhutan, Nepal, Myanmar and Afghanistan. As per the choice, FDI proposals from these nations want authorities approval for investments in India in any sector.
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