COCA-COLA ISSUE
RESOLVED AS PER ENTRY TERMS
As per
the approval granted on 17/07/1997, Hindustan Coca-Cola Holdings
Private Limited was required to fulfil the divestment conditions
by way of Indian participation of upto 49% in Hindustan Coca-Cola
Beverages Private Limited, its wholly owned subsidiary, over a
period of five years, i.e., by 16/07/2002. As per this condition,
Indian participation can be in the form of participation by individuals/
joint venture partners or general public or both.
Representations
made by the company for deletion of the divestment condition were
considered twice by the government in 1997 and rejected and also
twice by FIPB at its meetings held on 21/12/2000 and 4/10/2001.
The company again represented for waiver of divestment condition
on 9/4/2002, which was also rejected by the Department. The company
submitted yet another representation on 12/6/2002 for reconsideration
of their prayer for waiver of divestment condition in response
to which the Department granted one month’s extension with a clear
direction that the divestment condition should be fulfilled by
16/8/2002.
In
response, the company submitted a detailed representation outlining
the steps set in motion and giving its firm commitment to comply
with the divestment condition by not later than 28/2/2003. In
view of the fact that Hindustan Coca-Cola Holdings Private Limited
has agreed to comply with the divestment condition, the government,
after taking into consideration the steps taken and proposed to
be taken by the company to implement the divestment condition,
extended the time for fulfillment of the divestment condition
from 16/8/2002 to 28/2/2003. The company has proposed to divest
around 39% of its equity holdings in Hindustan Coca-Cola Beverages
Private Limited to private investors and business partners and
the balance 10% in favour of local resident Indian employee welfare
and stock option trusts. The divestment in favour of employees
and business partners is proposed to be completed by 17 October
2002 and the balance by 17 to 28 February, 2003.
