HTIL refutes charges of FDI violations
06 March 2007
New Delhi: With charges of violating FDI norms for overseas investors, having brought Hutchison Whampoa's telecom subsidiary in India under scrutiny, the Hong Kong-based firm asserted that its Indian mobile venture Hutch Essar Ltd did not violate any regulations.
The company, however maintains that its Indian joint venture Hutch-Essar is FDI-compliant and avers that the foreign ownership in HEL is 74 per cent and not higher.
The Foreign Investment Promotion Board has sought comments from Reserve Bank of India and Department of Telecom on HTIL's alleged breach of the FDI regulations and possible violation of ''foreign exchange management act (FEMA) and licensing conditions.
According to the charge the Hong Kong firm's holding in Hutch Essar aggregates 89 per cent, which includes HTIL's own 67-per cent stake and 22 per cent held by foreign entities of the Indian partner Essar Group.
It has been alleged that apart from its 52-per cent direct stake, HTIL also owns the additional 15-per cent stake in Hutch-Essar of the two Indian companies held by Analjit Singh and Hutch-Essar CEO Asim Ghosh.
However, Hutch-Essar contends that these were separate entities and there was no question of additional stake held by HTIL. "The company's structure has been done according to the known rules and regulations in India and has long been approved by the government", an HTIL spokesperson said.