A Government panel today deferred decision on UK-based Vodafone's plea to buy 5.48 per cent stake in telecom company Vodafone-Essar for about Rs 2,700 crore for want of comments from Home and Telecom ministries.
“No decision was taken today. The matter may come up again in the next meeting of the Foreign Investment Promotion Board (FIPB),” a senior Finance Ministry official said.
Indirect subsidiary
Mauritius-based Prime Metals, an indirect subsidiary of Vodafone International, had moved an application before the FIPB for permission to buy about 5.48 per cent stake in the Vodafone-Essar.
The Home Ministry and Telecom Ministry are yet to make any comment on Prime Metals plea, he added.
Prime Metals already holds about 1.53 per cent stake in Vodafone-Essar. If the deal materialises, foreign stake in the Vodafone-Essar will increase to over 69 per cent from the present about 64.38 per cent. Since foreign stake in the Vodafone-Essar is more than 49 per cent, the FIPB permission is must for the Mauritius firm to buy the stake in the joint venture company.
“Even after the clearance of FIPB, the deal must be cleared by the Cabinet Committee on Economic Affairs (CCEA),” the official added.
According to the FDI norms, proposals involving foreign investment of more than Rs 1,200 crore require the approval of the CCEA.