Arun Sarin is all set to add India to Vodafone's footprint. But, how much of Hutch Essar has Vodafone actually picked up? Going by the 11 February press releases of Vodafone and Hutch Essar, it has picked up a 67% stake. That's fine. But, government of India norms clearly stipulate that foreign invest in telecom should be restricted to 74%.
The catch is that of the 33% equity that Essar has, 22% is routed through Mauritius-based Essar Communications. That effectively means the foreign investment is 89% and not 74%.
Now, that has obviously raised a hue and cry in a country where telecom security is considered to be a major issue. Already Telecom Watchdog, a Delhi-based NGO has filed a public interest litigation (PIL) in the Delhi High Court. Rajeev Chandrasekhar, former owner of Mumbai's BPL Mobile and now Member of Parliament in the Rajya Sabha (upper house) has flagged it off in Parliament.
Meanwhile, the Foreign Investment Promotion Board (FIPB) and the ministries of finance and commerce are seeking details on the shareholding pattern.
The nub of it all is the 12.31% held by Analjit Singh, Hutch Essar managing director Asim Ghosh. Both Ghosh and Singh have in separate letters to the FIPB that these shares are held by them individually.
But, if that is so, how can Vodafone say it has picked up 67% in Hutch Essar? Or is there more to it than what we can see?
It's time Vodafone's Sarin and the Essar Ruias come out clean on the current shareholding pattern. But, then this nothing new with Hutch.
Right from when Analjit Singh sold off part of his stake in then Hutchison Max there have been murmurs on who really controlled the company. Now that the Chinese are out of hit, hopefully the Brits will come out clean.
That's the least that one can expect from the world's largest mobile company by revenues.
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