New Delhi, Oct. 8: The Foreign Investment Promotion Board (FIPB) will decide on the proposal of the Tatas and Singapore Airlines (SIA) to launch a full-service carrier on October 18.
In its application to the FIPB, the two groups had emphasised that the operations of the proposed joint venture would result in significant foreign exchange inflows.
Tata Sons and SIA had said their airline would not only generate employment but also boost the confidence of foreign investors in India.
In September, the Tatas had joined hands with SIA to form a full-service airline. They have signed a memorandum of understanding and applied to the FIPB to seek approval for foreign direct investment of $49 million.
Tata Sons’ brand custodian and chief ethics officer Mukund G. Rajan had said the company was hopeful of getting government approvals. Besides the FIPB, the venture will require clearances from the Directorate General of Civil Aviation, the tax department and other ministries.
“I think there is a process. So it (the approval process of Tata-SIA) will take its natural course. We are hopeful that we will get all the approvals,” Rajan had said.
According to the proposal, Tata Sons will own 51 per cent stake in the airline and SIA 49 per cent. The airline will have three members on its board initially — two nominated by Tata Sons and one by SIA, which will not have a “de-facto” control over the board. Prasad Menon will be the chairman.
Among others, SIA’s contribution to the joint venture will include access to the Singapore entity’s global network besides offering technical expertise.
The finance ministry today said three proposals involving Rs 38.09 crore in FDI had been cleared.
Equitas Holdings has been permitted to increase FDI in an investing company by way of share transfers. The proposal involves an investment of Rs 36.09 crore.
Franklin Templeton Asset Management (India) got the approval to act as an investment manager to various AIFs (alternative investment funds) and to contribute the mandatory amounts specified under the Sebi (AIF) Regulations.
The other proposal to be cleared was that of Chennai based Migatronic India.