The Hindu Business Line : Hindujas due diligence on Hutch next week

What they say
Mr Analjit Singh, Chairman of Max Group had said that Hutchison Essar should go to its natural owners.
Mr Arun Sarin, CEO, Vodafone, had said that Essar would be a natural partner for the UK-based company.

New Delhi , Jan. 12

The Hinduja Group today said that it would begin its due diligence for acquiring Hutchison Essar next week. This comes even as the group said it was considering a proposal to pick up stake in Telecom Italia, the cellular service provider from Italy.

Senior officials from the Hinduja Group said that they would begin due diligence once the other bidders for Hutchison Essar complete their process. Vodafone, Orascom Reliance Communication, Maxis and Essar are the companies interested in picking up a stake in Hutchison Essar.

Meanwhile, officials in Max Group said that it would be in the best interest of everyone that Vodafone partners with Essar while acquiring Hutchison Telecom International's stake in the Indian cellular company.

Mr Analjit Singh, Chairman of Max Group, had earlier told Business Line that Hutchison Essar should go to its natural owners.

Mr Singh holds about 7.6 per cent stake in Hutchison Essar in his personal capacity. Max was the initial promoter of the cellular company and then sold out its stake in tranches.

Echoing Mr Singh's sentiments, Mr Arun Sarin, CEO, Vodafone, had said that Essar would be a natural partner for the UK-based company. The Ruias-promoted Essar holds 33 per cent stake in Hutchison Essar and they could hold the key to the ongoing discussions.

Legal issues

Mr Singh, however, cautioned against legal issues clouding the proceedings. While he did not elaborate on the possible legal issues that could dampen a deal between Vodafone and Essar, analysts pointed out the wrangle over right of first refusal with both Hutchison and Essar having different interpretations.

The other issue could be Vodafone's 10 per cent stake in Bharti Airtel.

As per existing laws, a single company cannot hold more than 10 per cent stake in two different telecom companies in the same circle.

Mr Sunil Mittal, Chairman of Bharti Group, had said that disengagement talks have not yet begun though a non compete clause prohibits Vodafone from acquiring stake in a rival Indian cellular company for a period of one year after the British telecom company exits.

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