Indian Home Ministry is apparently set ready to give security clearance to Telenor Group for hiking its stakes in Unitech Wireless up to 74 percent, but that comes with a condition that none of the staff who have worked in Telenor Pakistan will be employed in India.
NEW DELHI: The home ministry is set to give security clearance to Norwegian telecom firm Telenor to hike its shareholding in Unitech Wireless, by
up to 74%, on the condition that none of the staff who have worked in Telenor Pakistan —100% owned by the Telenor group — are employed here.
The Foreign Investment Promotion Board (FIPB) had last month deferred a decision on allowing Telenor to hike its stake in Unitech Wireless following reservations of security agencies on the Norwegian firm’s strong presence in Pakistan and Bangladesh. Both nations serve as a launchpad for various terror attacks here.
While the worries over Telenor’s operations in Bangladesh, where it holds 62% of Grameenphone, are not so pronounced, both IB and RAW were highly suspicious about the security implications of Telenor’s presence in Pakistan through a 100%-owned subsidiary of the Norwegian parent company.
It was in the light of the security agencies’ fears that allowing the same firm to operate here could be detrimental to national interest that FIPB had put off a decision on the Unitech Wireless’ FDI proposal at its early June meeting.
MHA has since examined the security agencies’ views on the matter in detail, while keeping in mind reputation and stature of Telenor, which has presence in 14 countries across Europe and Asia and has also revolutionised rural telephony in countries like Bangladesh through Grameenphone.
With the government determined that a wrong message should not go out to FDI investors, the home ministry has come around to the view that Telenor should not be held back from picking up to 74% stake in Unitech Wireless simply because it has a successful presence in Pakistan.
At the same time, home ministry officials were categorical that the security concerns of the agencies needed to addressed while granting the go-ahead. It is against this background that MHA came up with a reasonable solution that no employees who at anytime were part of its Pakistan operations are moved to the Indian subsidiary.
This means, staff currently working in countries other than Pakistan but have served there at some point of time will come under the ‘ban’. Though a manager working here can always be sent to Pakistan, he or she would not be allowed to return to the Indian arm of Telenor.
Keeping human assets of the Indian and Pakistani arms of Telenor separate is expected to take care of risks such as spying and subversion.
MHA will be submitting to FIPB its views favouring a conditional security nod for Unitech Wireless’ FDI proposal ahead of the next meeting of the Board. This would pave the way for a final FIPB clearance, allowing Telenor to hike is stake in Unique Wireless to up to 74%.
Telenor has 49% stake in Unitech and now requires FIPB nod to complete its deal for 67% stake. This would give Telenor management control and 4 of the 7 seats on the board of directors. Telenor-Wireless combine is expected to start services later this year. Unitech has a pan-India licence and has secured spectrum in 21 of the 22 telecom circles.
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