Decision likely on Vodafone-Hutch deal at next FIPB meeting
04 April 2007
New Delhi: The Department of Telecommunications has said that a decision on Vodafone's proposal to acquire Hutchison Telecom's stake in cellular company Hutchison Essar, was expected in the next meeting of the Foreign Investment Promotion Board.
DoT has clarified that it had no objection to the proposed deal.
The clarification came on reports that DoT was objecting to the deal where UK-based Vodafone Group Plc was proposing to acquire 52 per cent stake in Hutchison Essar.
Apart from DoT, views of the Reserve Bank of India and Law Ministry have also been sought by FIPB. The RBI has expressed concern on the deal on the grounds that the equity holding structure could be violating the Foreign Exchange Management Act. With DoT favouring the deal, the Law Ministry views could be crucial to the decision making process.
FIPB is examining allegations that HTIL was illegally holding 67 per cent stake in Hutchison Essar by giving loans to Asim Ghosh and Analjit Singh to hold 12.26 per cent stake in the mobile venture on behalf of the Hong Kong-based company.