MP seeks probe into possible FDI rules violation at Future Generali

MUMBAI: A member of the Parliament is seeking a probe into a possible foreign direct investment rules violation at insurer Future Generali. The insurance joint venture between retail fame Kishore Biyani and Italy’s Generali has violated the 26% foreign direct investment limit as the total foreign holding, both direct and indirect, could be higher, alleges Tapan Sen, a Rajya Sabha member from West Bengal.

Other than direct investment by Generali, there are foreign companies that hold stakes in Biyani companies, which at an indirect level is higher than permitted , Sen wrote to finance minister P Chidambaram , according to a copy of the letter that is available with ET. The companies invested in Future Generali were Pantaloon Retail, Maatschappij Graafschap Holland, and Sprint Advisory Services, formerly Sain Advisory.

“The shareholding in our company is being wrongly scrutinised,” said Future Generali in an e-mail response. “The process of forming an insurance company is rigorous and strictly administered by Irda. The shareholding of Future Generali (India Life Insurance Company Limited) has been duly approved by the regulator and there has been no change in its shareholding ratio since inception.

All relevant regulations have been duly observed in this regard and there is no breach of FDI Guidelines.” Foreign ownership in many companies such as the Bharti-Walmart joint venture and flipkart.com have come under regulatory scrutiny for possible violations.