Danone rebuts Wadia claim on Press Note 1

Mumbai: French dairy giant Group Danone rebutted the claim made by the Wadia group that its 5 per cent investment in Bangalore-based bio-nutritional firm Avesthagen violates Press Note 1.

The French company said that there was no reason to get a no-objection certificate from the Wadias for the investment in Avesthagen as its products did not compete with any of the businesses of Britannia, its joint venture with the Wadias.

Avesthagen makes bio-actives for food products, which, sources said, did not compete with Britannia's food product range.

Avesthagen's promoters have also denied that the stake buy by Groupe Danone was a violation of norms. Villoo Morawala Patell, vice-chairperson and managing director, Avestha Gengraine Technologies said, "We are a nutraceuticals company and there is no way that we are competing with Britannia on any front."

The government has received a complaint from industrialist Nusli Wadia alleging that Danone had violated Press Note 1, 2005, which specifies that new proposals for foreign investment require the government's prior approval in cases where the foreign investor has an existing joint venture agreement with an Indian company in the same field.

The Wadias and Danone hold an equal stake in Associated Biscuits International Holdings (ABIH), through which they control Britannia. Danone has three directors on the 14-member board, the rest being Wadia nominees.