Hutch stake: Asim Ghosh, Analjit Singh to clarify

Amid allegations of breach of FDI norms in Hutch-Essar, its minority stakeholders Asim Ghosh and Analjit Singh along with Vodafone and HTIL would be making brief presentations to FIPB on March 29 to make their case.

Ghosh and Singh jointly hold about 12.26 per cent stake, which is in the centre of a controversy on whether it actually belongs to them or HTIL (or now Vodafone).

The two shareholders, along with Vodafone and HTIL, have heen asked by FIPB to clarify their position on March 29, sources said, adding that all the four parties have been given 5-10 minutes each to make their case.

While HTIL would be represented by legal firm Amarchand Mangal Das and UK telecom giant Vodafone would be represented by its senior official looking after merger and acquisitions.

Official sources, when contacted, said that FIPB has also sought Home Ministry's opinion on the matter.

The controversy relates to allegation that Vodafone, which acquired 52 per cent controlling stake in Hutch-Essar from HTIL, also owns the 12.6 per cent stake held by Ghosh and Singh, but the two have denied the charge.

Since Essar owns 22 per cent FDI in its 33 per cent stake in the joint venture, the total FDI limit would cross the 74 per cent limit and this is being examined by the FIPB.

Ghosh and Singh have already written to FIPB assuring that they are the actual owners of their respective stakes and not acting as front of HTIL and now Vodafone.

FIPB had sought comments from various departments including RBI, Department of Telecom and Department of Industrial Policy and Promotion.  Meanwhile, FIPB has asked RBI, DoT and DIPP to clear their stand on 12.26 per cent stake in Hutch-Essar.

Since all the three had in the past skirted the crucial issue of this stake, FIPB would wait for the second round of replies from them and after that would hear out the representatives of the stakeholders on Thursday.

Last month, the Li Ka-Shing owned group agreed to sell its 67 per cent stake to UK's Vodafone for an enterprise value of $18.8 billion.

The Department of Telecommunications was of the view that 74 per cent FDI in Hutch-Essar was compliant with the guidelines and put the ball in FIPB's court by suggesting that an investigation could be carried out if required. DIPP too said the shareholding was in conformity with the law. RBI also, according to official sources, had touched on the overall issue without getting into details.

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