Telecom firms may be allowed foreign bosses

Telecom players including Tata Teleservices may get a breather with the government set to review foreign direct investment norms for the sector to see if companies with overseas investors appoint foreigners to senior management positions.

"We are looking at it," Commerce and Industry Minister Kamal Nath said. He added that the question of appointing expatriates was being examined in the context of whether it applied in retrospect or in prospect.

Government officials said there was a thinking that the terms and conditions should be made applicable to those cases where FDI was more than 49 per cent.

The officials also pointed out that since the new FDI policy had been approved, any amendment would have to be referred to the Cabinet.

The review has been prompted by an application made by Tata Teleservices that the requirement under the new norms to have only resident Indian citizens in senior management positions, such as managing director, chief executive officer, chief technical officer and financial officer in companies with foreign partners, is coming in the way of an appointment made by the company before the norms were notified.

The Investment Commission, headed by Ratan Tata, has also written to Nath and Finance Minister P Chidambaram on the matter.

"These new conditions appear to be in conflict with the steps the government has been taking as part of its economic reforms and liberalisation agenda, and there is a need to reconsider whether these conditions are in consonance with the spirit of enhancing the FDI limit from 49 per cent to 74 per cent," the commission said.