Date:30/03/2007 URL: http://www.thehindubusinessline.com/2007/03/30/stories/2007033006100100.htm

Back FIPB defers decision on Vodafone deal

Our Bureau

New Delhi March 29 The Foreign Investment Promotion Board (FIPB) has once again deferred a decision on the proposed acquisition of Hutchison Telecom International Ltd's stake in Hutchison Essar by Vodafone. FIPB has sought more information about the deal from the companies.

At Thursday's meeting, Mr Asim Ghosh represented Hutchison Essar, Mr Mathew Kirk represented Vodafone and legal firm Amarchand Mangaldas presented the case on behalf of HTIL.

Meanwhile, the Finance Minister, Mr P. Chidambaram, has been quoted by international news agencies as saying that the approval for the deal could take 2-3 weeks after Vodafone gives all the information to FIPB. The Minister is currently travelling in China. Government sources also told Business Line that since the Reserve Bank of India had raised some issues regarding the foreign holding in Hutchison Essar, particularly that it might breach the 74 per cent FDI ceiling, the Law Ministry was carefully examining these points before formulating a suitable response. "Therefore it will take some time before the FIPB can take a stand on the deal," said sources.

Vodafone's proposed acquisition of HTIL's stake had run into rough weather after allegations were made that the 12.26 per cent stake held by Mr Asim Ghosh and Mr Analjit Singh, Chairman, Max Group, was being held on behalf of HTIL.