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Thomas K Thomas

Says co has misrepresented facts on FDI levels

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New Delhi March 4 The legal wrangle over Vodafone's buyout of Hutchison Telecom International Ltd's (HTIL) stake in Hutchison Essar has taken a new twist with a non-governmental consumer organisation filing a public interest litigation in the Delhi High Court alleging that Hong Kong-based HTIL has misrepresented facts on the Foreign Direct Investment levels in the Indian cellular company.

The Delhi-based consumer group, Telecom Watchdog, said in its petition filed on March 1 that the FDI levels in Hutchison Essar was more than the permissible 74 per cent. The Delhi High Court is scheduled to take up the petition on March 7.

Violating Norms

Speaking to Business Line, Mr Prashant Bhushan, counsel for Telecom Watchdog said, "While Hutchison Telecom claims that it has 67 per cent stake in Hutchison Essar to its shareholders in Hong Kong, it says that it has only 51 per cent stake when the Indian Government asks. The shares have been held by HTIL through benami route and this violates the FDI norms of the telecom sector which has a cap of 74 per cent."

Mr Bhushan said that the petition has sought to cancel the licence of Hutchison Essar for violating Government norms.

HTIL has officially maintained that the company held 51 per cent directly in Hutchison Essar. Ruias promoted Essar Group holds 33 per cent while individuals including the Max Group Chairman, Mr Analjit Singh; and the Managing Director, Hutch Essar Mr Asim Ghosh, hold the balance. Mr Bhushan pointed out that HTIL was constantly talking about diluting 67 per cent stake to its shareholders.

More Stories on : Telecommunications | Mergers & Acquisitions | Foreign Direct Investment | Courts/Legal Issues

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