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Maran says no to Coca-Cola plea on public issue

Union Commerce and Industry Minister Murasoli Maran on Wednesday ruled out amending the foreign investment norms to address a plea from US-based beverages major Coca-Cola to defer its public issue.

He also said that he had personally asked Singapore Prime Minister Goh Chok Tong to impress upon his country's flag carrier to reconsider acquiring a stake in Air-India in a joint venture with the Bombay-based Tata group.

Addressing an ongoing Economic Editors' Conference in New Delhi, Maran said Coca-Cola was a signatory to an entry condition which required its subsidiary - Hindustan Coca-Cola Holdings -- to go for an initial public offer in India by June 2002.

Coca-Cola was asked to divest a 49-per cent stake in the company over a five-year period as a pre-condition to set up downstream ventures as 100-per cent subsidiaries.

Earlier this month, however, the beverages major had moved the Foreign Investment Promotion Board, asking for a five-year extension of this clause in the light of reported accumulated losses worth Rs 20 billion.

The finance ministry, however, objected to Coca-Cola's proposal and now Maran, who heads the FIPB, has also taken a similar stand.

"We cannot change the rules for one company. They (Coca-Cola) are themselves a signatory to the memorandum of understanding. If we change the rules for one company, you will yourself say then that we have shown favouritism towards one company," Maran said.

On Singapore Airlines, Maran said the topic was raised with Goh during his visit to the island nation last week.

"I was with him (Goh) for around 20 minutes or so. I told him you may please revive the proposal with the Tatas. But he told me SIA itself is in trouble like other airlines in the world. I don't know where the matter will head," Maran said.

SIA, which had formed a consortium with the Tata group, was one of the two bidders shortlisted for acquiring a 40-per cent stake in state-owned Air-India.

But the airline pulled out of the venture last month, citing delays in the government's decision-making process, as also bureaucratic and political hurdles, as reasons behind such a move.

On the controversial issue of US energy major Enron wanting to exit the Dabhol Power Company, Maran said the case was 'different'.

He said 80 per cent of the loans for the $2.9 billion project had been extended by Indian financial institutions. "You cannot say one project will make a difference to our foreign direct investment. There are a lot of other success stories."

Indo-Asian News Service

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