Vodafone's Hutchison Essar Bid Hits Regulatory Snags

According to a report in the Economic Times, Vodafone Group's planned buyout of India's Hutchison Essar may be delayed by regulatory snags. Foreign ownership of telecom companies in India may not exceed 74%. Hutchison Essar has agreed to sell its 67% stake in the company jointly owned with India's Essar Group, who own the rest. Two-thirds Essar Group in turn is held through an offshore unit, which is also considered foreign ownership. The regulatory inquiry seems to hinge on a 12.26% stake held by Hutchison Essar CEO Asim Ghosh and investor Analjit Singh -- and on whether Hutchison Telecom was the beneficial owner of that stake. Vodafone said it sees "no big surprise" in the move, and said it is not looking to acquire its interest through any backdoor. Arun Sarin, Vodafone CEO, said to a group of journalists: "We think we are in compliance... At the end of the day, I want the FIPB (Foreign Investment Promotion Board), the Finance Ministry, the Ministry of Communications, the Minister of Industry and the Prime Minister to say that you are welcome here. The last thing we want to do is to show up there (India) and allow some people to say... Are you coming into India through back door or side door?"

Sources: Reuters, Hindu Business Line
Commentary: Vodafone Makes Smart Move In India • Vodafone In Booming Indian Wireless: Tread Carefully • Vodafone's Sarin Is Losing The Plot
Stocks/ETFs to watch: Vodafone Group plc (VOD), Hutchison Telecommunications International (HTX)

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