The President has decided against intervening in the possible acquisition by CMC Limited, a firm owned by the Government of India, of UniSoft Group Ltd. (UGL), a British computer software firm with a subsidiary in the United States.
The President based his decision on the results of the investigation by the Committee on Foreign Investment in the United States (CFIUS), chaired by Treasury Secretary Nicholas F. Brady. CFIUS conducted a thorough investigation of various national security issues relating to India's acquisition of UniSoft Corp., the U.S. subsidiary. UniSoft develops, markets, distributes, and customizes software operating systems.
The CMC-UniSoft investigation was conducted pursuant to section 5021 of the Omnibus Trade and Competitiveness Act of 1988. That provision, known as the Exon-Florio provision, authorizes the President to investigate and, if necessary, to suspend or prohibit a proposed foreign acquisition of a U.S. business engaged in U.S. interstate commerce. The criteria to suspend or prohibit a transaction are that the President must find:
credible evidence to believe that the foreign investor might take actions that threaten to impair the national security;
that existing laws, other than the International Emergency Economic Powers Act and the Exon-Florio provision itself, are inadequate and inappropriate to deal with the national security threat.