New Definition of "Group Companies" Puts Bharti-Walmart in Trouble

Bangalore: On one hand where Indian Finance Minister P Chidambarm has been trying hard to improve the Foreign Direct Investments in the Indian sub continent, on the other hand government policy makers are making things more difficult.

Indian whole sale chains, cash-and-carry businesses or e-commerce companies like Bharti Walmart may have to reorganize their maneuvers after the Department of Industrial Policy and Promotion issued a new explanation of “group companies”.

The department defines the “group companies” as “two or more enterprises that directly or indirectly are in a position to exercise 26 percent or more voting rights in the other enterprise, and can appoint over 50 per cent members of board of directors in the other enterprise”, reported Business Standard.

The action was to clarify an April 2010 policy that asked cash-and-carry businesses to bind their sale to group firms at 25 per cent of their revenues but not make clear what group firms meant.

IPL Fiasco: Dhoni's Stake In Sports Marketing Firm Raise Suspicion
How Brands Like Google And Apple Tricked Tax?