The Hindu Business Line : FIPB defers decision on Vodafone

New Delhi April 23 The Foreign Investment Promotion Board (FIPB) on Monday yet again deferred a decision on Vodafone's application to acquire majority stake in Hutch-Essar. This is the third deferment since the UK-based mobile operator submitted its application to the FIPB.

Vodafone had submitted its proposal to the FIPB for clearance in the last week of February through the group's investment arm Vodafone International Holdings BV Netherlands after acquiring controlling stake in Hutchison-Essar for $11.1 billion from the Hong Kong-based Hutchison Telecommunication International Ltd (HTIL). The decision was deferred today because the comments from the Law Ministry had been received at the last minute and members of the board sought time to study the Ministry's views.

Speaking to newspersons after the meeting, the Secretary in the Department of Industrial Policy and Promotion (DIPP), Mr Ajay Dua, said, "The Law Ministry's views have been received today only and have been circulated among the members. We shall take some time to study them."

"The FIPB would meet again on Friday to discuss the issue," he said.

Asked whether the DIPP has given its views on the foreign shareholding pattern in Hutch-Essar, Mr Dua said, "It is not an individual's matter. There has to be a collective decision by all the participants of FIPB."

Clearance from the FIPB is necessary in the case of Vodafone buying out Hong Kong-based Hutchison's shareholding in Hutch-Essar in view of the doubts raised over the minority stake of 12.6 per cent held jointly by the Hutch-Essar Managing Director, Mr Asim Ghosh, and Max Group chief Mr Analjit Singh.

Earlier, in the last meeting held on March 20, the board had deferred the decision because the Reserve Bank of India had sought time for studying the deal. As of now, the views from all the Ministries concerned and agencies have been received.

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