Vodafone yet to win over Indian regulator

SO NEAR and yet so far. Vodafone has yet to complete a charm offensive which will win the Indian investment regulator's approval for its acquisition of Hutchison Essar.

The company has until April 23rd to get its story straight. The problem stems from 15 per cent of Hutchison International (HTIL) held by two Indian nationals: - Analjit Singh of Max India and Asim Ghosh, md of Hutchison Essar. Both are Indian nationals so it would appear that Vodafone has reached its goal.

Indian law requires no more than 74 per cent of a telecommunications company to be held by an offshore company. In theory Essar's stake in the Hutch network should be counted as entirely Indian but sadly two thirds of this is held abroad.

So Singh and Ghosh's stakes are vital. Unfortunately, HTIL appears to have options over their stakes which would enable it to buy the shares back at a favourable rate.

This makes the pair look like mere puppets and kind of makes a mockery of Indian's efforts to ensure that a significant stake in a telecommunications company remains at home.

The bottom line is that between Vodafone and Essar there's got to be 26 per cent of Hutch that looks like it is held by independent Indian ventures. Let's see if the lawyers can work this one out. µ

See also Vodafone admits trouble over Essar
Vodafone finishes off deal for Hutch in India
Vodafone bags hutch India