India’s Foreign Investment Promotion Board (FIPB) has reportedly granted security clearance to an application by Verizon Communications India to transfer a number of shares between two overseas holding companies. According to India’s Business Standard website, the long-awaited decision overrules previous concerns raised by the Ministry of Home Affairs (MHA). The MHA had expressed reservations that the Indian unit, which originally secured ILD/DLD licences in November 2007, was sharing data with US intelligence agencies such as the National Security Agency (NSA) and the Federal Bureau of Investigation (FBI).
According to TeleGeography’s GlobalComms Database, US telco Verizon holds an indirect 74% stake in Verizon Communications India via a number of foreign subsidiaries, with Leo Communications (part of Indian conglomerate Videocon) retaining the remaining 26%. However, in an application dated almost two years earlier, Verizon’s India arm sought approval to transfer 1,000 equity shares held by Singapore-based Verizon Asia Pacific Holdings to Verizon European Holding, which is situated in the UK. The move – part of a wider group restructuring exercise – was initially rejected last year, but Verizon has since reasoned that it was not actually raising its stake in the Indian operator, merely transferring the shares between non-resident entities.