Govt Defers Orix Corporation's FDI Proposal; Dubs It As Round-Tripping

  • The Department of Revenue, part of the Finance Ministry of India,has objected to a proposal by Japan-based Orix Corporation to invest in an Indian trust. The IL&FS Orix Trust, which bought 2% stake in Multi Commodity Exchange, was to issue units to Mauritius-based Orix
    Mauritius Trade Winds Investment Company.
     
    The proposal is facing objections as the department of revenue belives that the proposal is
    taking advantage of the India-Mauritius Double Taxation Avoidance Agreement, reports Economic Times.
     
    The department has dubbed the investment as round-tripping – capital belonging to a country, which leaves the country & then is reinvested in the form of FDI.
     
    The Foreign Investment Promotion Board (FIPB), the nodal body for clearing foreign investment into India, has deferred the proposal. IL&FS Orix Trust still has to register as a venture capital fund with market regulator SEBI and does not have any foreign equity participation. The investment in MCX was done by Infrastructure Leasing ... [Follow Original Article link for full content.]