Financial Daily from THE HINDU group of publications
Saturday, Feb 25, 2006


News
Features
Stocks
Shipping
Archives
Google

Group Sites

Home Page - Mergers & Acquisitions
Info-Tech - Telecommunications
Corporate - Corporate Disputes


Birlas want probe by Telecom Dept

Thomas K Thomas

Story so far
Feb 8- Birla alleges Tata violating licence norms with stake in both Idea and Tata Tele. Urges DoT to get Tata exit Idea
Feb 16- Tatas say share in Idea legal. Terms Birla's allegations misleading
Feb 22- Birla sho ots off second letter questioning Tata holding in Idea through
Mauritius based company. Tatas says DoT should be concerned with direct holdings onlyFeb 24- DoT says it will intervene in the dispute after looking through the details

New Delhi , Feb. 24

The spat between the Tata Group and Aditya Birla Group has gone a notch higher with the latter shooting off another missive to the Department of Telecom seeking a probe into the Tata's acquisition of a Mauritius-based AT&T Cellular company which has a stake in Idea Cellular.

In a letter on Wednesday, the Birlas have alleged that the transaction was `impermissible' since Tatas had not taken permission from the Government and, therefore, the move violated the cellular licence norms, which prohibits common promoters in two different companies in the same circle.

While Tatas indirectly hold 48.15 per cent stake in Idea Cellular, it also offers mobile services through Tata Teleservices in almost the same circles.

The Tata Group on its part have said that Apex Investment (Mauritius), formerly AT&T Cellular, continues to be the promoter of Idea Cellular and "any changes in the shareholding of Apex at Mauritius had no consequence to DoT, as DoT itself had clarified that `promoters' are only those companies that have a direct shareholding in the licence company. There has been no change of TIL's direct shareholding in Idea Cellular which stand at 31.69 per cent."

Tatas said that though Apex Investment was wholly owned subsidiary of Tata Industries Ltd, the Mauritius-based company was the direct promoter in Idea Cellular and, therefore, there was no issue of having a common direct promoter in Tata Teleservices.

"The shareholding of Apex in Idea Cellular continues to be foreign shareholding as permitted under the FEMA 1999. The purchase of foreign shares of Apex did not require DoT approval," it added.

Senior DoT officials said that they are looking into the matter and may soon convene a meeting between the two corporate houses.

Voting rights

In the eight page letter sent by the A V Birla Group on Wednesday has also said DoT should prevent Tata Group from exercising voting rights or management control in Idea since it was allegedly violating the licence norms.

"The telecom policy requires that the Tata Group cannot maintain any shareholding direct or indirect in Idea. The Tata Group's Mauritius transaction required permission, was incapable of receiving that and was yet transacted, " said the letter from the Birlas.

Related Stories:
Tatas, Birlas to buy out New Cingular's stake in IDEA for Rs 1,300 cr

More Stories on : Mergers & Acquisitions | Telecommunications | Corporate Disputes | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
Fall in agri items price pulls inflation lower


Railway Budget — Lalu takes on low-cost airlines, drops AC fares
Farming out new job market — Agri-biz courses arrive in a big way
Chip sector seeks sops for mega projects
BhOB board not to renew CEO contract — IPO scam cited as reason behind it
HSBC sells 7.19 pc in UTI Bank for Rs 638 cr
Birlas want probe by Telecom Dept
Satyam sees rise in ITES revenues



The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line