CCEA raised objections to 8800 crore proposal of Chinese pharma firm

Vastavam web: The CCEA has raised objections to the Rs 8,800 crore proposal of Chinese pharma firm Shanghai Fosun to acquire majority stake in domestic company Gland Pharma, a development that come amid heightened tensions between India and China over border dispute.The Cabinet Committee on Economic Affairs (CCEA) in its meeting last month did not approve the proposal, said sources who did not want to be identified.The ostensible reason behind holding back the approval is the modern injectable technology that the Hyderabad-based Gland Pharma has, which the government is wary of falling into foreign hands.

In April, the proposal was approved by the then inter- ministerial body foreign investment promotion board (FIPB).It had recommended the Rs 8,800 crore foreign investment proposal of Gland Pharma Ltd to the CCEA for approval.Subsequently, Fosun would get contractual right to acquire 100 per cent shares of Gland Pharma from other shareholders of the company in one or more tranches, as per the proposal approved by FIPB. Proposals over Rs 5,000 crore approved by the then FIPB required CCEA approval.When contacted, Gland Pharma said it was yet to get any communication from the government.