Sources said that the FIPB, in a meeting on Saturday, opined that whether Daimler Benz had purchased shares for increasing its stake in Telco from the open market or from the Tatas, it was an FDI.

"The investment made by Daimler Benz cannot be perceived as an FII transaction," they added.

Telco and Daimler, in their representation to the industry ministry, had said that the dividend balancing clause should not apply as the shares were purchased from the open market and it did not involve any fresh issue of capital into Telco.Moreover, the FIPB cleared proposals worth Rs 200 crore on Saturday including US-based Ford Motor Co's to set up a wholly-owned subsidiary to manufacture software components and Bahrain-based Midal Cables for transmission equipment for the power sector.

Midal hasproposed to invest Rs 64 crore to manufacture aluminium rods, wires and conductors for the power sector.

The FIPB also cleared the application of Prime Broking Company to set up a non-banking financial services company which will invest Rs 21 crore and be engaged in debt, broking and other NBFC activities.

The proposal of Daewoo Power to allow ABB as a 50 per cent joint venture partner also got the go-ahead among 30 proposals, sources said.

Ford Motor and Ford International will set up a wholly-owned computer software company in Chennai. The Rs 10-crore unit, which would come up near Ford's facility near Chennai, would develop financial and management accounting software to be deployed at all the Ford Motor facilities and its affiliates in the Asia Pacific region.

The proposal of Daewoo Anchor Electronics - seeking clearance for paying technical fees to Daewoo Corp - was deferred by the FIPB as the limit sought by the Korean company was more than the prescribed norms. The Daewoo Anchor proposal hasbeen deferred for a week as a reply from the department of electronics giving a final nod to the application is still awaited.

The company had sought payment of $4 million as technical fees to Korean partner Daewoo Corporation. Besides, the company is also seeking to alter the debt-equity structure from 3.5:1 to 1.5:1.

The board has approved Illinois Institute of Technology to set up a technology institute which will offer courses in computer science and software.