New Delhi: The telecom ministry has given a clean chit to Vodafone on the Hutch-Essar deal, saying that no licencing condition was violated by the company.
However, the final call rests with the Foreign Investment Promotion Board (FIPB), which is likely to take a decision during the next meeting scheduled on April 12.
The FIPB chairman Finance Secretary Ashok Jha will look into the veracity of allegations of breach of FDI norms by Vodafone while sealing the Hutch-Essar deal. Meanwhile, the Department of Telecommunication has given a clean chit
BOTTLE-NECK: Vodafone CEO Arun Sarin is yet to hear the FIPB's decison on the Hutch-Essar deal.
"As far as we are concerned, Vodafone did not violate any licencing condition. A decision is expected at the next meeting of the FIPB," Secretary Department of Telecom DS Mathur was quoted by PTI as saying.
FIPB is looking into the foreign shareholding pattern in Hutch-Essar in which UK telecom giant Vodafone bought a controlling stake from Hutchison at an enterprise value of $18.8 billion.
Vodafone's acquisition of Hutchison Telecom International's (HTIL) stake in Hutch Essar Ltd HEL got into complications when FIPB sought details of the loans extended to Asim Ghosh and Analjit Singh—the shareholders who together have 12 per cent stake in HEL.
The complicated shareholding structure had raised apprehensions that Vodafone has perhaps breached the 74 per cent foreign investment ceiling, prescribed for the telecom sector.
However, both Ghosh and Vodafone CEO Arun Sarin have maintained that despite the loans extended by Hutch, Ghosh and Singh were independent shareholders and voted the way they wanted to.
With inputs from PTI