India not agree to South Africa's proposal of dual listing of shares
Considering of full convertibility of rupee not being in place, India could not have agreed to South Africa’s proposal of dual listing of shares that ultimately caused the collapse of the USD 23 billion MTN-Bharti merger deal, analysts quoted.
Experts have expressed the view that as the Indian rupee is not fully convertible, it is not possible to move in for dual listing of shares which allow people to buy shares in stock exchanges of one country and sell in bourses of the other country.
Expressing similar opinion, Jagannadham Thunuguntla, equity head SMC Capital said, “There will be flight of capital from one country to another without any control… this cannot be allowed unless we have full currency convertibility.”
The laws cannot be changed and altered to accommodate the wishes of a single company.
Experts have mentioned that adding such changes need to be incorporated after taking into consideration the implications for the country as a whole.
The Indian government’s policy, which is guided by the Tarapore Committee reports lay emphasis on going for fuller capital account convertibility and not full convertibility.
Under the full convertibility, capital can move as capital from one country to another.
Currently, India allows convertibility of current account, which means transactions relating to trade and investment.
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