Bengaluru, Nov 20 (PTI): Former chief financial officer of Infosys andmultiple-investor Mohandas Pai Tuesday pitched for enablingfounders of start-ups and companies to maintain control over them while diluting capital by separatingownership and control over them, which can be done by bringingin change to the existing laws.

“The ownership and control of start-ups and private companies as of now should be legally separated,” he told PTI.

“This can bedone by changing the outdated laws. Once that is done, the founders of the start-ups and companies will be able to maintain control over them even as they dilute capital,” he said.

Pai, however, said he was not blaming the government on the issue.

He said countries across the globe, especially in America and China, enable their fledgling companies to pick upbillions of dollars on their stock exchanges to create theirassets, which assure them to retain control through designed financial instruments, structures, incentives and rights.

“Jack Ma and Mark Zuckerberg own economic benefits, but control Alibaba and Facebook through trusts and contracts listed on foreign bourses,” Pai said.

In contrast, the Indian companies were caught in a web of outdated legislation and were not allowed to create their assets and retain control through designed financial instruments, structures, incentives and rights, Pai said.

The Indian companies cannot be listed on overseas exchanges unless the entity is listed in India because of which Indianentrepreneurs have become digital vassals, he said.

About 95 per cent of Indian start-ups would have overseas investors in the majority and their founders would eventually be eased out of such companies, Pai said.

“We are going to see a time, maybe 90-95 per cent of our start-ups will have overseas investors in the majority and founders, who are of Indian origin, will all be reduced to employees and will have to go out of the companies,” he said.

“Take Flipkart for example, if somebody buys 77 per cent stake in the company, the founder will have no say. It is natural,” he said adding: “I won’t blame Walmart for that.”

This is published unedited from the PTI feed.