What's the news? Starting June 1, any national from a country that shares a land border with India must seek security clearance from the Ministry of Home Affairs if they wish to be appointed as a director on the board of an Indian company, a notification issued by the Ministry of Corporate Affairs stated. Why is this important? While the notification appears to target all neighbours that share a land border with India—China, Pakistan, Bhutan, Myanmar, Afghanistan, Nepal and Bangladesh—it is, in practice, largely going to affect Chinese nationals the most because the country has far more investments in Indian companies than the other neighbours. This requirement is in line with Press Note 3 of 2020, which mandates government approval for foreign investment coming from countries sharing land borders with India. Why was this law introduced? According to Economic Times, this requirement has been imposed after it was found that Chinese and Hong Kong investors were circumventing the restrictions imposed in 2020 on foreign investments from neighbouring countries. "In some instances, it was found that a Chinese company would create a US or Cayman Islands-based entity through which it routed the investment without any restrictions. It would subsequently appoint senior Chinese executives as directors to exercise control," the report explained. Speaking to Hindu Business Line, Atul Pandey, Partner, Khaitan & Co said that the Ministry of Corporate Affairs has recently investigated multiple complaints against many companies with Chinese directors, hinting at another possible reason for this new requirement. Why was the 2020 law introduced? The 2020 law was introduced…
- India’s Consumer Protection Authority Notifies Guidelines For Dark Patterns, What’s New? December 1, 2023
- Tata Consultancy Services to pay $210 million in a trade secret row in the US December 1, 2023
- Indian Government Approves Scheme To Provide Drones To 15,000 Women Self Help Groups December 1, 2023
- Google agrees to pay news publishers in Canada December 1, 2023
- Court Watch: Tech Policy Cases India’s Courts Are Hearing this December December 1, 2023
MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.
Factors like Indus not charging developers any commission for in-app payments and antitrust orders issued by India's competition regulator against Google could contribute to...
Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...
RBI Deputy Governor Rabi Shankar called for self-regulation in the fintech sector, but here's why we disagree with his stance.
Straw man fallacy: IT Ministers’ defence of government exemptions in data protection law misses the point
Both the IT Minister and the IT Minister of State have chosen to avoid the actual concerns raised, and have instead defended against lesser...
The Central Board of Film Certification found power outside the Cinematograph Act and came to be known as the Censor Board. Are OTT self-regulating...
Please subscribe to MediaNama. Don't share prints and PDFs.
You May Also Like
Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...
135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...
Twitter takes down tweets from MP, MLA, editor criticising handling of pandemic upon government request
By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...