The board allowed the Zurich Insurance proposal on the condition that the approval will be operational only after the company ceases to function as an asset management company and will operate as a nun-fund based NBFC and shall not set up any wholly owned subsidiary or joint venture.

With the proposed transfer of the one crore shares held by Russel Credit Ltd, a subsidiary of ITC Ltd, to Zurich Insurance, ITC Threadneddle AMC Ltd will become a wholly owned subsidiary of Zurich.

Zurich already controls 50 per cent stake in ITC Threadneedle AMC Ltd, through a merger with British American Financial Services, of whichUK-based Threadneedle Asset Management Ltd was a subsidiary. The 50 per cent share held by Russel Credit will be acquired by Zurich's subsidiary, Zurich Finance (Mauritius) Ltd.

Meanwhile, FIPB has permitted Hughes Escort Communications Ltd to make a foray into Internet services, e-commerce and software development. The board has also cleared the proposals of ABB and Levi Strauss.

Sources in industry ministry said ABB has got the go ahead to reduce its preference share capital while Levi Strauss has been granted approval to issue preference shares to its foreign partner Levi Strauss Mauritius Ltd.

The 51:49 joint venture between Escorts Ltd and US major Hughes has also been allowed to manufacture, design, sell and install telecom products.