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Raj Royals plea for equity transfer abroad rejected

May 19, 2010 17:58 IST

The Finance Ministry, for the second time, turned down a proposal of Jaipur IPL Cricket (JIPL), the joint-owners of Rajasthan Royals, to transfer its entire equity abroad in a cashless transaction.

The Foreign Investment Promotion Board (FIPB) rejected the JIPL plea on objections from the Sports Ministry, a source said.

Besides JIPL, the FIPB also turned down the foreign investment proposal of three other companies – Coreobjects Software Inc USA, Bangalore-based Telelogic ICT Services and Mumbai-based Gremach Infrastructure Equipments and Projects.

The JIPL proposal was to "induct 100 per cent foreign equity by way of issue of shares for consideration other than cash". It approached the government a second time for reconsideration of its proposal after it was rejected earlier last October.

After deferring it several times, the FIPB finally rejected the JIPL request.

"There was no ground for reconsideration," the official said.

The England-based Emerging Media and the Mauritius-based EM Sports Holding had paid JIPL's share of the Rajasthan Royals franchisee fee to the Board of Control for Cricket in India. The company sought permission to transfer its entire equity to these companies in a cash-less deal.

Besides JIPL, other owners of Rajasthan Royals include Raj Kundra, husband of cine star Shilpa Shetty.

Coreobjects Software Inc USA wanted to transfer shares by way of share swap to undertake business of software development/ITeS.

Telelogic ICT Services was seeking ex-post-facto approval for issuing equity shares against rent and incorporation expenses while Gremach Infrastructure Equipments and Projects had approached the FIPB for ex-post-factor approval for issue for warrants.

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