Seeking to provide more clarity to foreign investors, the government, on Thursday, approved a comprehensive definition of the term ‘control’ for the purpose of mergers and acquisitions, involving overseas companies.

As per the decision, ‘control’ will include “the right to appoint a majority of the directors or to control the management or policy decisions including by virtue of their shareholding or management rights or shareholders agreement or voting agreements.’’

The decision regarding this was taken by the Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh, sources said.

There have been uncertainties about the exact definition of ‘control’ with respect to various deals in recent times, including the proposed Rs.2,058 crore Jet-Etihad transaction, which was cleared by the Foreign Investment Promotion Board (FIPB) recently.

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