Raising the wall higher: This time no directorship without security clearance

Table of Content

• ACTS ADMINISTRATED BY IS-I DIVISION
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• From green airports to 50 new RCS routes and disinvestment of Air India, here is the year-end review of MoCA
• Corporate Travel: Making Smart Decisions
• How to obtain the security clearance from the Ministry of Home Affairs
• Foreign nationals from border sharing countries need security clearance from Home Ministry for obtaining DIN
• What is the procedure for obtaining clearance from the Ministry of Home Affairs for the conference Visa/seminar/workshop?
• Management

The new policy is aimed at bringing about a healthy balance between meeting the imperatives of national security and facilitating ease of doing business and promoting investment in the country. Broadcast of live events without prior registration will invite penal action, which could include suspension or cancellation of the channel’s permission. The guidelines, however, don’t clarify which event to be uplinked live would be construed as a news or current affairs event, leaving it up to the decision of the central government. Only such events, which from the standpoint of parameters require MHA’s security clearance, should be forwarded by the Ministries/Departments of the Central Government, State Government, PSUs etc. to the Ministry of Home Affairs at least 30 days prior to the commencement of the event. The current notification, in collaboration with PN-3, has tried to ensure that Indian businesses are secure from hostile takeovers from foreign powers, especially China. An additional layer of check involving the MHA will ensure authenticity of any foreign directors trying to be on the board of an Indian company.

Further, in the application for DIN (Form DIR-3), under the heading verification, the person applying for it must declare whether they are required to obtain security clearance from the Ministry of Home Affairs or not. Further, in Form DIR-2, the directors are also required to declare whether he/ she are required to obtain security clearance from the Ministry of Home Affairs or not. So far, in all instances of CPSE privatisation, the government would seek details regarding security clearance of the bidders at the second stage of the bidding process.

ACTS ADMINISTRATED BY IS-I DIVISION

Afghanistan, China, Iraq, Pakistan, Sudan, Foreigners of Pakistani origin and Stateless persons. Now, the person seeking appointment as a director who is a national of a country that shares a land border with India shall have to obtain necessary security clearance from the Ministry of Home Affairs, Government of India shall attach the same along with the consent. The Form DIR -2 has also been suitably amended to include a disclosure from the applicant that he/she is not required to obtain the security clearance from the Ministry of Home Affairs, Government of India before seeking an appointment as director. Now security clearance from Home Ministry would be required if a person seeking an appointment as a director or applying for Director Identification Number is a national of a country that shares a land border with India. The necessary security clearance shall be attached along with the consent or application for DIN. Thus, taking the theme of protectionism one step further, through the 2022 Amendment Rules, restrictions on countries sharing land borders with India has been extended beyond investments to cover management of Indian companies to now include nationals who hold or seek to hold directorship positions in Indian companies.

Ministry of Home Affairs on 01st June 2022 issued a notification requiring to amending the Companies Rules, 2014. In pursuant to the amendment, it will become mandatory to obtain security clearance for individuals from countries sharing land borders with India before being appointed as directors on the boards of Indian companies. The guidelines reiterate that security clearances from the MHA will be mandatory for the company and its directors, in case of a change in directors or appointment of a new executive, change in shareholding pattern, or the transfer of a channel from one entity to the other.

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India Law Offices shall not be liable for consequences of any action taken by relying on the material/information provided on this website. The contents of this website are the intellectual property of India Law Offices. Role of Independent Directors and their Appointment The role of an independent director includes the task of improving the corporate credibility and governance standards of a company by acting.. MHA has cleared about 1,100 cases of security clearance in the past one year. Although the given timeline is 90 days, MHA strives to decide Security Clearance cases in 60 days , which is being reduced further. In 2016, there were 209 cases which were over 6 months old; in 2017, this came down to 154 cases and further down to 47 cases in 2018.

The step is definitely in the right direction, although it might create longer application and approval procedures that may increase the administrative burden. The participants should have a valid national passport or any other internationally recognised travel document establishing his/her nationality and identity and bearing his/her photograph, and a valid visa for India granted by an authorised Indian representative abroad. Passport should have at least six months validity at the time of making application for grant of visa. Passport should have at least two blank pages for stamping by the Immigration Officer.

From green airports to 50 new RCS routes and disinvestment of Air India, here is the year-end review of MoCA

The Ministry of Home Affairs has given security clearance to Air India CEO-designate Campbell Wilson, paving the way for him to take charge of the airline, a government official said. If the service is not completed within the due time, track the status online or reach out to the department. The Bar Council of India does not permit advertisement or solicitation by advocates in any form or manner. By accessing this website, , you acknowledge and confirm that you are seeking information relating to India Law Offices of your own accord and that there has been no form of solicitation, advertisement or inducement by India Law Offices or its members. The content of this website is for information purpose only and should not be interpreted as soliciting or advertisement. No material/information provided on this website should be construed as legal advice.

There is no objection to the delegates coming to attend conference etc. in India combining tourism with attending the conference. Missions may, therefore, at their discretion grant visas for the required period. Such visa shall not exceed 6 months, subject to usual conditions applicable for the grant of the Tourist visa. In the above cases, MEA will examine the proposal along with MHA clearance may be granted within four weeks. Clearance will be conveyed to the Missions and organizers of the conference. In case a Mission needs clarifications about the organizers, it can also refer the case to MEA and MHA.

Corporate Travel: Making Smart Decisions

In this blog post, we analyse the key implications of this amendment. Indian Government has recently mandated that foreign nationals from a few countries, before they are confirmed as directors on boards of Indian companies, need to go through security clearance. In case the person seeking appointment is a national of a country which shares land border with India, necessary security clearance from the Ministry of Home Affairs, Government of India shall also be attached along with the consent. As per the Companies Act, private and public companies must have a minimum of two and three directors, respectively. Further, as per Section 149 of the Companies Act, every company must have at least one resident director who has stayed in India for a total period of at least 182 days during the financial year. Hence, Indian companies can have numerous foreign nationals as directors on their Board, which indicates that they can play a crucial role in the functioning and management of a company and can assert significant influence on the decisions of the company.

The guidelines also specify that channels which do not remain operational for 60 days should inform the I&B ministry, along with reasons about why it has remained non-operational, failing which, it would receive a warning. In case the channel continues to be non-operational for over 90 days, it would invite suspension or cancellation of permission. Also included in the amended guidelines are provisions for penal action, such as a warning and/or prohibition of broadcast up to 30 days, for use of dual logos for a channel or using a name or logo not approved by the ministry. “The guidelines do not specify a timeline required to get a licence, so business planning can’t take place,” the second source said. “But, they do not explicitly state if a channel with security clearance already in the broadcasting business will have to go for another round of security clearance from the MHA if it has to open a new channel,” the source quoted above said. The new guidelines also list a series of penal actions for violations from broadcasters, ranging from prohibiting a channel’s broadcast for 30 days if it uses dual logos, to stopping a channel from live broadcasts for up to six months in case it fails to register for the telecast of a live event.

A foreign national intending to attend an International Conference/ seminar/ workshop while already in India on Business/ Employment / Student/ Research visa may seek prior permission of the FRRO/ FRO concerned by making a suitable application along with all relevant details. However, in respect of cases falling within the parameters of Prior reference categories, such permission shall be granted by FRRO/ FRO concerned only with the prior approval of the Ministry of Home Affairs. Provided that no application number shall be generated in case of the person applying for Director Identification Number is a national of a country which shares land border with India, unless necessary security clearance from the Ministry of Home Affairs, Government of India has been attached along with application for Director Identification Number. The amendment requires necessary security clearance from Ministry of Home Affairs, GoI in case the person seeking appointment to act as Director shares land border with India alongwith the consent. A second industry source said there is a disconnect between the guidelines and the Companies Act, because most of the time, “new directors in the company are from within the employees, and unless the MHA gives security clearance to the person, he or she cannot take up the job”.

No proposal for setting up of new SEZ will be entertained without this information. Before obtaining DIN, such person required to take approval from Ministry of Home Affairs and such clearance/ approval are required to be attached in DIR -3. A further amendment has also been made to Rule 10 which relates to the allotment of the DIN. Rule -10 prescribes that on the generation of the that on the submission of the Form DIR-3 on the portal and payment of the requisite amount of fees through online mode an application number shall be generated by the system automatically. Security clearance is granted by the Ministry of Home Affairs after assessing reports received from the Central Intelligence and investigating agencies from the national security point of view. Average processing time for such clearance was about 71 days in 2018.

As per information provided by Department of Industrial Policy & Promotion and Reserve Bank of India, FDI through automatic route is under general permission and can be received without any approval, in compliance with the Foreign Exchange Management Regulation, 2017. No information is available about the number of proposals received for FDI under automatic route. Therefore, information related to percentage in terms of number of FDI proposals coming through the automatic route is not available. Sounds exactly like how “nationalists”/”republicans” tend to savage certain reforms by certain( ahem!) structured belief-systems ( “organised religions”). The guidelines also do not mention preconditions for use of foreign satellites. Industry sources said the new guidelines do address some challenges in terms of the ease of doing business in the broadcast sector.

I am a Cable operator and apply for MSO registration, My file is pending form 6month approx due to security clearance. I invest the money of 1lakh and submitting all required documents. Need MIB department received required documents and payment the issue MSo registartion. Government delay, it is not good for cable operator, Very big loss in this situation. The draft guidelines are also quiet on the time to be taken by the government to issue a licence to a private satellite television channel, leaving the decision to the political dispensation of the day. The objective of national security clearance is to evaluate potential security threats, including economic threats, and provide risk assessment before clearing investment and project proposals in key sectors.

The changes are mainly brought in to restrict Chinese takeovers in India. According to MCA data, there are about 490 foreign nationals registered as directors in India companies, 30% of whom are Chinese. No, the request to participate in the international conference/seminar/workshop shall be made directly to the Mission.