Guwahati: The government has revised company regulations to make prior clearance required for investments by corporations and individuals from countries that share a land border with India.
On May 5, the corporate affairs ministry modified the regulations governing prospectus and security allotment under the Companies Act, 2013. "No offer or invitation of any securities under this rule shall be made to a body corporate incorporated in, or a national of, a country that shares a land border with India, unless such body corporate or national, as the case may be, has obtained government approval under the Foreign Exchange Management (Non-debt Instruments) Rules, 2019," the ministry stated in its notification. Radle 14 in the Companies is referred to by the NE (Prospectos and Allotment of Securities)
According to the announcement, the permission shall be attached to the private placement offer with an application letter. "This is a procedural modification in the application forms as a result of Press Note 3," said Akila Agarwal, Partner, and Head of M&A at Cyril Amarchand Mangaldas, of the changed guidelines.
In April 2020, the Department for Promotion of Industry and Internal Trade published Press Note 3 on foreign investments.
Following the coronavirus outbreak, the government made prior clearance essential for foreign investments from countries that share a land border with India in order to reduce opportunistic takeovers of indigenous enterprises.
Countries that have land borders with India are China, Bao, Pakistan, Bhutan, Nepal, Myanmar, and Afghanistan.
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