Vodafone deal still suspect, NGO says

Vodafone deal still suspect, NGO says
Comment E-mail Print Share
First Published: Fri, May 11 2007. 11 15 PM IST
Updated: Fri, May 11 2007. 11 15 PM IST
The man behind the organization that is opposing the largest telecom foreign direct investment in India, Vodafone Group Plc.’s acquisition of mobile telephony firm, Hutchison Essar Ltd, denied that he represented corporate rivals.
Telecom Watchdog, a non-governmental organization that has challenged the acquisition for violation of foreign ownership rules, came back into the news on Thursday for reviving a petition in the Delhi high court against the acquisition. A day after bringing back the two-month-old case back to life, Anil Kumar, secretary, Telecom Watchdog, said he wasn’t representing companies that benefit if the deal is delayed. Kumar added he has no time to extend his litigation to sectors other than telecom, which have instances of similar alleged rule violations.
“I have not studied the other cases. We have studied this case in depth. We will be able to handle only telecom at this moment,” Kumar, a telecom engineer, who started magazine Telecom Live in 2004, a year after he left a job with Fujitsu, said in an interview.
Telecom Watchdog, which was just another of Delhi’s numerous consumer organizations until February, when the Vodafone deal in India was announced, shot into prominence after it filed a complaint with the Delhi high court alleging that the two Indian investors in Hutchison Essar were acting as proxy shareholders for Hutchison Telecommunications International Ltd or HTIL. By doing so, the foreign holding in Hutchison Essar pierced a 74% ceiling set for overseas shareholding, Telecom Watchdog alleged.
HTIL and its two Indian partners—Asim Ghosh, chief executive of Hutchison Essar, and Analjit Singh, chairman of Max India—denied the charges and the Centre approved the $10.9 billion Vodafone-HTIL transaction on Wednesday.
Kumar, who works from a wood-panelled office on the ninth floor of the upscale Ansal Bhavan in Delhi’s Connaught Place, said Hutchison Essar, under its new owner Vodafone, is still not free from its sins. Though the British firm has given assurances that it will value the stakes of Singh and Ghosh at $431 million, the 45-year-old said he is determined to press on. “If you are a pick-pocket and I catch you taking out a Rs100 note from my pocket, should I let you go just because you offer to give it back to me?” he asked.
Kumar filed his public interest petition on the Vodafone deal, the first by his eight-year-old NGO in March, a month after the British company beat rival bidders such as Reliance Communications Ltd, the Hinduja Group and the Essar Group—a partner in the target phone firm. Before the case, his organization has just one public initiative to its credit: An application on the merger of state-owned telecom companies before a parliamentary committee in 2005. “I do not get time after taking care of the magazine,” he said.
Kumar brushed aside allegations that he was funded by Hutchison Essar’s rivals in his latest enterprise. “I have spent only Rs3,000-4,000 on this case,” he said. “In the whole of last year, my organization spent only Rs17,897.” Even that money comes from voluntary donations from a network of 400-500 well-wishers, Kumar said.
The well-wishers help him keep his costs in check, he said. “They do my research for me. I do not need money for anything other than for paying court-fees and making photocopies,” Kumar added.
There are several instances in sectors such as insurance and media that foreign equity caps have been circumvented by loans from foreign partners and call options on Indian holdings.
But Kumar said he does not expect the courts to spread the scope of his litigation beyond Hutchison Essar and, perhaps, the Chennai-based Aircel Cellular Ltd, which has a loan from Maxis Communications Berhard of Malaysia to the Reddy family of the Apollo Hospitals Group, which holds 26% in the company.
“The courts generally don’t pass sweeping orders, they are very specific in (confining themselves to) whatever has been prayed in the petition... So, we are not going to touch any other sector at this moment.” he said.
Comment E-mail Print Share
First Published: Fri, May 11 2007. 11 15 PM IST
More Topics: Corporate News | Sector Spotlight |