Pantaloon Retail

Confounding expectations Press Notes 2 and 4 will stay as they are, according to a press report this morning. Perhaps a few lawyers will not have been surprised, however.

"There is no plan to make any changes in Press Note 2 and 4 at all," an unnamed "senior finance ministry official" told the Indian daily Business Standard.

Upsetting for some - Indian lawyers have complained for months now about the grey areas in Press Notes 2, 3 and 4 that were feared (or hoped) to allow foreign direct investment (FDI) through a backdoor route.

"I am surprised that such statements are being given," said one Mumbai-based corporate partner, who added that Press Note 4 governing downstream investment and ownership and control issues needed some work done. "We were quite sure that there would be something which would clearly clarify things and not leave anything to interpretation."

On the other hand, for several months now Legally India had heard off-the-record murmurings from a small handful of lawyers that they did not think the Finance Ministry would revise the Press Notes.

Did they know something that journalists and other lawyers didn't?

Pressure from Bharti, MTN and their advisers could have also swung the mood, as both the companies and the Government hope to seal the biggest cross-border M&A deal in India's history, which will rely on the Press Notes in its complex structuring.

And Pantaloon Retail too – whose current legal advisers Legally India has unsuccessfully been trying to confirm for ages – embarked on the first steps to an ambitious restructuring to increase foreign investment stakes in reliance on Press Notes 2 and 3.

An seemingly gutsy move at the time but perhaps Pantaloon and its advisers too knew something others did not, despite the restructuring having now apparently been put on hold.