The government on Friday cleared British telecom firm Vodafone's application for buying a majority stake in India's fourth-largest mobile operator Hutch-Essar Ltd. Vodafone, the world's largest mobile operator in terms of revenues, had bought a controlling 52 per cent stake in HEL from Hong Kong-based Hutchison Telecom International at a total enterprise value of over $18 billion.
The company's application was cleared by the Foreign Investment Promotion Board at a meeting in New Delhi.
In its meeting, FIPB noted that the 15 per cent minority shareholding in HEL was not owned or controlled by foreign entities, making the company fully compliant with FDI norms.
"We are fully satisfied with the compliance level...they have to comply with Press Note 3 of 2007 to remain in telecom sector," Ajay Dua, secretary, Department of Industrial Policy and Promotion, said after the FIPB meeting.
"They (minority shareholders) will have to inform the government as and when they sell their 15 per cent stake to a foreign player," he said.
The 15 per cent stake is held by HEL managing director Asim Ghosh, Max India chief Analjit Singh and IDFC.
The race for Hutch-Essar: Complete coverage
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