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India defers decision on Vodafone’s Hutch Essar buy

India defers decision on Vodafone’s Hutch Essar buy
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First Published: Mon, Apr 23 2007. 08 34 PM IST
Updated: Mon, Apr 23 2007. 08 34 PM IST
Reuters
New Delhi: India’s foreign investment body deferred on 23 April, a decision on Vodafone’s $11 billion (Rs45,628 crore) plan to buy Indian mobile carrier Hutchison Essar, a government official said.
The Foreign Investment Promotion Board (FIPB) will study some comments from the law ministry before considering the issue again, Industry secretary Ajay Dua said after the board meeting.
“We have just received the law ministry’s response on 23 April. It is a detailed response. We have to study it. The FIPB will meet again on 27 April,” he said.
The FIPB had earlier sought more details about the deal, particularly the foreign holding in Hutchison Essar and had deferred a decision twice.
Hong Kong-based Hutchison Telecommunications International Ltd (HTIL) agreed to sell a majority stake in Hutchison Essar, India’s fourth-largest carrier to Britain’s Vodafone Group Plc for $11.1 billion in February.
India allows foreign ownership of up to 74% in a domestic telecom firm and media have reported that the authorities are looking into the ownership structure of Hutchison’s stake, which includes some shares held by local partners.
HTIL controlled 67% in the Hutch Essar joint venture, with India’s Essar Group holding the rest. Two-thirds of the Essar Group’s 33% stake is held overseas, which counts as foreign holdings.
It had said earlier it is in full compliance with the law and Vodafone has said it expects the deal to close in the second quarter.
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First Published: Mon, Apr 23 2007. 08 34 PM IST
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