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For executives working in Pakistan, who want to join a MNC in India in a strategic sector, which also has operations in the neighboring country, or merely shift to India within the same company, their doors could well be closed from now.
The Foreign Investment Promotion Board (FIPB) which cleared a proposal by Norwegian telecom major Telenor to increase its stake in its Indian company Telewings Communications Services Pvt Ltd from 49% to 74% as an unusual rider: officials who have worked in Pakistan “will not be allowed to work in India”.
The contentious clause was added because two ministries- ministry of home affairs (MHA) and the department of Telecommunications wanted such a restriction. In its deliberations MHA conveyed that it would give security clearance to the company subject to the condition that it may be incorporated in the licencing condition that “no person who is working in Pakistan including Telenor Pakistan should not be allowed to work in India”.
Even DoT had raised the same issue saying that officials who have worked in Pakistan should not be allowed to work in India.
The decision by the government to put the stop on the movement of executives working in Pakistan is significant as there are many strategic sectors in which MNCs have operations or equity stake both in India as well as in Pakistan.
For instance in telecom Singtel which has stake in India’s Bharti Airtel also has a 30% stake in Warid a telecom services provider in Pakistan. Axiata which has stake in Idea Cellular has 89% stake in Multinet which runs an optic fibre cable network connecting major cities in Pakistan. Telenor SA has a 100% fully owned telecom services company in Pakistan.
The issue also came into the fore last year when its estranged Indian partners Unitech had raised this issue earlier with the Government saying that the company’s former ’s managing director Sigve Brekke in India also was part of the top management in its Pakistan operations earlier.
Responding to Business Standard query, a Telenor spokesperson said, in e-mailed statement: “Brekke has never been employed by Telenor Pakistan. He has only held a non-executive position on the board for a brief period. His appointment as Uninor’s MD followed a full security clearance process under the same rules that exist today."
Brekke however has already moved out as the managing director of the Indian company in May and Yogesh Malik has become the CEO . Brekke has now become head of Asian operations based in Singapore from where he overlooks India and other five other markets. However it had applied for regulatory approvals to become chairman of the Indian entity, which has not come till date.
"There is no reason for leadership change at Uninor to happen on that account. The reason for change in leadership at Uninor is the company’s transition into an operational phase and Sigve Brekke’s focus on his role as the head of Asia operations, expanding Telenor group’s presence to new markets such as Myanmar,” said the Telenor spokesperson.
