Story so far
Feb 8- Birla alleges Tata violating licence norms with stake in both Idea and Tata Tele. Urges DoT to get Tata exit Idea
Feb 16- Tatas say share in Idea legal. Terms Birla's allegations misleading
Feb 22- Birla sho ots off second letter questioning Tata holding in Idea through
Mauritius based company. Tatas says DoT should be concerned with direct holdings onlyFeb 24- DoT says it will intervene in the dispute after looking through the details

Thomas K Thomas

New Delhi, Feb. 24

The spat between the Tata Group and Aditya Birla Group has gone a notch higher with the latter shooting off another missive to the Department of Telecom seeking a probe into the Tata's acquisition of a Mauritius-based AT&T Cellular company which has a stake in Idea Cellular.

In a letter on Wednesday, the Birlas have alleged that the transaction was `impermissible' since Tatas had not taken permission from the Government and, therefore, the move violated the cellular licence norms, which prohibits common promoters in two different companies in the same circle.

While Tatas indirectly hold 48.15 per cent stake in Idea Cellular, it also offers mobile services through Tata Teleservices in almost the same circles.

The Tata Group on its part have said that Apex Investment (Mauritius), formerly AT&T Cellular, continues to be the promoter of Idea Cellular and "any changes in the shareholding of Apex at Mauritius had no consequence to DoT, as DoT itself had clarified that `promoters' are only those companies that have a direct shareholding in the licence company. There has been no change of TIL's direct shareholding in Idea Cellular which stand at 31.69 per cent."

Tatas said that though Apex Investment was wholly owned subsidiary of Tata Industries Ltd, the Mauritius-based company was the direct promoter in Idea Cellular and, therefore, there was no issue of having a common direct promoter in Tata Teleservices.

"The shareholding of Apex in Idea Cellular continues to be foreign shareholding as permitted under the FEMA 1999. The purchase of foreign shares of Apex did not require DoT approval," it added.

Senior DoT officials said that they are looking into the matter and may soon convene a meeting between the two corporate houses.

Voting rights

In the eight page letter sent by the A V Birla Group on Wednesday has also said DoT should prevent Tata Group from exercising voting rights or management control in Idea since it was allegedly violating the licence norms.

"The telecom policy requires that the Tata Group cannot maintain any shareholding direct or indirect in Idea. The Tata Group's Mauritius transaction required permission, was incapable of receiving that and was yet transacted, " said the letter from the Birlas.

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(This article was published in the Business Line print edition dated February 25, 2006)
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