New Delhi: The communication and IT ministry is believed to have informed the Foreign Investments Promotion Board (FIPB) that it had no objection to Vodafone's acquisition of equity in Hutch-Essar and feels. It also says that it is the finance ministry that is better equipped to look into FDI aspects in the deal.
DoT officials say that from their view was that the deal was FDI compliant, but the ministry of finance and the FIPB are the ultimate decision makers on FDI limits in companies their breach.
The FIPB is seeking clarifications from Hutchison Whampoa's Indian telecom venture HTIL, which holds a 67-per stake in Hutch-Essar along with the 15 per cent stake held by Asim Ghosh and Analjeet Singh, and other shareholders on the equity structure in the joint venture.
According to DoT officials, the communication ministry was only playing the role of a nodal ministry by issuing clarifications whenever sought, while agreeing that the finance ministry should take the final call.
DoT does not decide on FDI limit as companies raise and reduce the FDI level on their own within the permissible limits and then approach FIPB for approval or apprising. They also apprise DoT as FIPB seeks the nodal ministry's views while approving the proposal in normal cases.
The Delhi High Court has asked FIPB to wind up the scrutiny of Hutch-Essar within two months after an NGO Telecom Watchdog alleged breach of FDI norms by outgoing foreign partner Hutchison Telecom (HTIL).
In their communications to DoT, shareholders Asim Ghosh, CEO, Hutch-Essar, and Analjit Singh, who between them hold nearly 15 per cent stake in Hutch-Essar, had submitted that they have 100-per cent ownership rights over their shares in the mobile firm, besides unrestricted voting and dividend rights on these shares.
HTIL has been maintaining that FDI in Hutch-Essar is 74 per cent, out of which 52 per cent was held by it and 33 per cent by Essar and that the 15 stake of Asim Ghosh and Analjit Singh should also be factored as Indian companies, as they are separate entities and their additional stake did not belong to HTIL.