DIPP yet to decide on transfer of NRI’s stake to Pakistani national

NEW DELHI: Indian authorities are in a dilemma over how to deliver shares in an Indian company to a Pakistani national. Dawood Siddique, a non-resident Indian, had willed that his 2.5% stake in PTL Enterprises, an associate firm of Apollo Tyres, be transferred to his son, Rafique Dawood, a Pakistani national. The matter, which was put before the Foreign Investment Promotion Board (FIPB) in January this year, has since been forwarded to the Department of Industrial Policy and Promotion (DIPP), an official told ET.

PTL Enterprises became an associate company of Apollo Tyres Ltd (ATL) in 1995, when Premier Tyres’ facility in Kalamassery, Kerala, was acquired by Apollo.

PTL Enterprises confirmed that the company has initiated the process of share transmission to the legal heir of Siddique Dawood in accordance with the law.

“The shares of PTL Enterprises were issued to Dawood Siddique after receiving necessary regulatory approvals. After his death, his legal heir, Rafique Dawood, approached us for share transmission,” a spokesperson for PTL Enterprises said, adding that the company is waiting for regulatory clearances.

Bombay Stock Exchange-listed PTL Enterprises was incorporated in 1959. It is also the holding company of Artemis Health Sciences Ltd, which manages the Artemis Health Institute (AHI) Gurgaon, Haryana.

Another official said in cases where Pakistani nationals are involved, the government is extra cautious. “It is a regulatory process. It has nothing to do with the name of the said person or his legal heir,” he added.

In 2012, the government had allowed FDI from Pakistan with the prior approval of the FIPB. This included purchase of shares and convertible debentures by Pakistani national or entities of an Indian company other than those operating in sectors such as defence, space and atomic energy and “sectors/activities prohibited for foreign investment”.

Experts said the matter should have been settled much earlier, as the issue does not involve new FDI inflow. “Just because the case is of a Pakistani national, the government is likely to follow the procedure under national security,” said Abhimanyu Bhandari, a SC lawyer.