The Telegraph
Since 1st March, 1999
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Bill to screen security firms

New Delhi, April 21: Foreign companies providing security services in India will have to scale down their equity below 50 per cent, according to a legislation that seeks to regulate a business that has mushroomed in the country as a result of domestic outsourcing.

A licence regime will also be put in place to keep all tabs on the functioning of security agencies. The licence, which has to be renewed every five years, can be cancelled if repeated complaints of non-performance are made against an agency's employees.

The Private Security Agencies (Regulation) Bill, moved in Parliament today, aims at barring grant of licence to security agencies which have a foreigner as proprietor or majority shareholder or majority partner. This means the foreign partner will have to dilute its stake below 50 per cent, giving control to the Indian partner.

The usual suspect ' 'serious security implications' 'is being cited as the reason for this clause which is expected to affect several big players in India. Group Four Securicor, one of the foreign companies active in India, employs as many as 65,000 people in the country.

But government officials said the prime target of the bill is the small-time security agency ' now a ubiquitous feature in all cities where establishments increasingly tend to farm out the job.

Some often pass off untrained personnel ' sometimes with a criminal record ' as security guards.

The new law will hold the companies responsible for negligence or involvement of their guards in crimes.

New firms seeking a licence ' existing firms will get a grace period of one year ' will have to train their personnel in line with rules that will be drafted once the law is enacted. A positive antecedent report will also be made mandatory for hiring guards.

The proposed law has also introduced the concept of a retirement age, 65. It also seeks to formally bar ' an unofficial ban exists now in some states ' guards from wearing uniforms that resemble those of the armed forces or police.

The bill will be scrutinised by a parliamentary standing committee before it is considered for passage. This is the second time that an attempt to regulate private security agencies is being made. The first attempt in December 1994 did not make much headway.

But the officials suggested that the bill would be passed this time.

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