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Insolvency Resolution Cannot Interfere with FDI Rules, Government Says

October 31, 2017

Insolvency Resolution Cannot Interfere with FDI Rules, Government Says

The ministry of corporate affairs said that an insolvency process cannot break the rules set for the foreign direct investments (FDIs). So, a foreign investor cannot buy equity above a certain limit as per the FDI norms set for the particular industry even in a stressed company.

The ministry wrote a letter to the stakeholders in which it said- as an example, a resolution plan must not consider 100% foreign investment in a corporate debtor if the FDI policy allows for a foreign investment only up to 75% in the particular industry.

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