Infosys Technologies has sought an exemption from the Foreign Exchange Management Act (FEMA) regulations to purchase insurance cover for its directors abroad.
Finance ministry officials said that so far a decision has not been taken on granting the exemption. The matter has been referred to the Insurance Regulatory and Development Authority for its comments, they added.
The company refused to comment on the issue. "Infosys is unable to revert (to the questionnaire) as it is in the silent period due to ADS issue," a reply from the company said.
Officials said that the cover that Infosys proposes to purchase is offered by Indian insurers in the form of D&O covers. They added that the company had sought an exemption from FEMA as norms do not permit Indian corporates to purchase an insurance cover from foreign companies if that product is being offered by domestic insurers, units in special economic zones being the only exception.
"They want a treatment similar to SEZs," said an official. A D&O cover offers insures the company from losses arising out of a problem to its directors.
The product has become particularly popular after a spate of corporate scandals in the United States in the last few years.