MP advocates caution on foreign investment

Telecom czar Rajeev Chandrasekhar, who sold out his business to Essar, has said the ability of foreign investors to create loopholes and bypass either the letter or spirit of regulations "should be resisted and dealt with strongly and unambiguously".

He has also called for Parliament to focus on the issue. "There cannot be a twilight zone of ambiguity created in strategic sectors," he said in a press statement today.

Chandrasekhar, who is an independent MP in the Rajya Sabha, said there are a small number of investors who do not respect the "letter and spirit of our nation's laws".

"India should turn down offers of investments where a compromise of our policy or law is the consequence of the investment. Encouraging investments such as these has a gradual corrosive impact on our system and polity which will come back and haunt us later," he said.

Chandrasekhar issued the press statement after reports about a question he has asked of Communications Minister Dayanidhi Maran. The question, listed for March 15, 2007, seeks to find out the current telecom policy in so far as it relates to foreign ownership and control of Indian companies.

Chandrasekhar has also asked Maran to comment on whether a foreign company "" Hutchison Telecom International Ltd "" is the beneficial owner of a stake in Hutchison Essar that violates the 74 per cent cap on foreign ownership as per the FDI regulations.

Maran has also been asked to detail the steps taken by the central government and the Department of Telecom to investigate and ascertain the facts of the equity ownership and control of Hutch Essar.

Chandrasekhar has also pointed out that any restrictions or fetters imposed on foreign investors must be respected by them.