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Our Bureau

New Delhi , July 14

The Foreign Investment Promotion Board (FIPB) has given clearance to Hong Kong-based Hutchison Telecommunications to increase its stake in the Indian cellular company Hutchison Essar to 68 per cent. It is however not yet clear whether the approval includes Egyptian telecom operator Orascom's stake.

Orascom stake

Orascom had earlier picked up a 19.3 per cent stake in Hutchison Telecom, which gave it a 10 per cent indirect stake in Hutchison Essar. The Orascom deal had come under Government scrutiny, with the National Security Advisor, Mr M.K. Narayanan, having written a letter to the Department of Telecommunication saying that Orascom's acquisition of equity in Hutch International was a threat to national security as the Egyptian operator was a dominant mobile operator in Pakistan and Bangladesh.

While Essar sources said that the approval would not include Orascom's stake, sources in Hutchison said it would be included. This is the third approval given by the FIPB to telecom companies to increase the FDI beyond 49 per cent. Current guidelines stipulate that proposals involving FDI between 49 per cent and 74 per cent in an Indian telecom venture require to be cleared by the FIPB.

More Stories on : Telecommunications | Foreign Direct Investment

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