Concerned over Mauritius-based investors taking over Indian firms through the secondary market route, Securities and Exchange Board of India (Sebi) has sought clarifications from the government on whether such investments should be construed as foreign direct investment (FDI) or foreign institutional investor (FII) investment to remove ambiguity in rules.The market regulator has written to the Department of Industrial Policy and Promotion (DIPP) in the commerce and industry ministry, and the matter is being examined, official sources said.While issues of FDI is dealt by DIPP, issues regarding FIIs are handled by the finance ministry. DIPP has been in talks with Reserve Bank of India (RBI) to sort out the issue for a few months, sources added.While RBI is looking at the pricing of shares in such takeovers, Sebi's concern is limited to compliance with the Substantial Acquisition of Shares and Takeovers Regulations of 1997.
