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Our Bureau

New Delhi May 28 The Delhi High Court on Monday issued notices to Vodafone Group Plc and Hutchison Telecommunications International Ltd following a petition filed by Telecom Watchdog, a non-governmental group, which alleged breach of foreign direct investment regulations. The Court has asked both companies to respond to the petition within six weeks. The next hearing of the case has been scheduled for August 9.

Telecom Watchdog has alleged that the deal between Vodafone and HTIL to acquire latter's stake in Indian mobile company Hutchison Essar is in violation of the FDI norms. The NGO alleged that the FDI component in the company is well over 80 per cent even as the permitted level is 74 per cent.

Court notices

The Court had earlier directed the Government to look into the allegations. The Finance Ministry, through the Foreign Investment Promotion Board, had investigated the allegations and subsequently gave a clean cheat to the deal earlier this month. Vodafone has also completed the acquisition of the HTIL stake in Hutch Essar.

The Court has also sent notices to the Hutchison Essar's Managing Director, Mr Asim Ghosh, and the Chairman of Max Group, Mr Analjit Singh. The two individuals hold 12 per cent of Hutchison Essar, which is the bone of contention.

Telecom Watchdog has alleged that the stake is being held indirectly by the two individuals on behalf of Vodafone. The sale-breached India's Foreign Exchange Management Act and the licensing conditions for providing telecommunications services in India, Telecom Watchdog said in its petition.

More Stories on : Telecommunications | Mergers & Acquisitions | Courts/Legal Issues | Foreign Direct Investment

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