After Hutch, FIPB eyeing at Aircel ?

As per a latest news in Economic Times, after Hutch the shareholding structure of Aircel Cellular can also come under the lens of the Foreign Investment Promotion Board (FIPB). Like Hutch, Maxis Communications too consolidates nearly 100% of its stake in Aircel in its overseas accounts though its equity stake in the Chennai-based operator stands at just 74%. As per the filing by the company to the Malaysian stock exchange Bursa Malaysia in March 2006 - "With equity interest of 74% in Aircel (comprised 65% direct interest and 9% indirect interest) and 100% subscription of cumulative redeemable non-convertible preference shares in Deccan Digital, this effectively gives the group 99.3% economic returns from the investment in Aircel,” . Maxis had teamed up with the Pratap Reddy family and incorporated a joint venture company, Digital Networks Private Ltd, in India to buy Aircel in 2005-06. Maxis subscribed to the non-convertible preference shares in this company, giving the group nearly 100% economic interest in Aircel. Indian investment rules stipulate that foreign investors can own only up to 74% in an Indian company and that domestic investors should own the remaining. However, in some cases such as Hutch-Essar, the foreign company is also enjoying the economic benefits of the entire 100% raising questions as to whether this violates the investment guidelines. On February 28, the Foreign Investment Promotion Board (FIPB) wrote a letter to Hutchison Essar asking them to name the beneficial owners of the entities controlled by Indians.
Aircel provides cellular services in nine circles and has over 5 million subscribers.