Center spikes 3 FDI proposals

By agencies   |   Monday, 28 November 2005, 08:00 Hrs
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NEW DELHI: The government has rejected three high profile foreign investment proposals by Cargill, Universal Leaf Tobacco Company and ChrysCapital.

Cargill has proposed to get into commodity exchange brokerage by setting up a non-banking finance company while Universal Leaf Tobacco Company wanted to trade in tobacco and ChrysCapital wanted to pick up 12.89 percent stake in Development Credit Bank.

Though 100 percent FDI is permitted in Non Banking Finance Company, Cargill’s proposal was rejected, as commodity exchange brokerage does not come under the activities permitted for the NBFCs.

In case of ChrysCapital’s proposal to pick up stake in Development Credit Bank, the Reserve Bank of India objected to it as the Aga Khan Foundation, major backers of the DCB had already infused funds into the bank and there was no need for the bank to raise further funds by selling shares to ChrysCapital.

The investment proposal of Universal Leaf Tobacco Company was rejected after the Agriculture ministry raised objections. The ministry was of the view that India was one among the first to enact a law for tobacco control in April 2003 and such a proposal promoted the use of tobacco.

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