Vodafone cleared its last hurdle in acquiring a controlling stake in Hutch Essar with finance minister P Chidambaram giving his go-ahead on Friday. His approval comes within a week of the Foreign Investment Promotion Board giving its nod for the acquisition.
The FM’s approval should pave the way for Vodafone to secure management control of HEL and for the company to be renamed Vodafone Essar. Sources said as a first step, Vodafone will now be able to constitute a new 12-member board to oversee the operations of the company. Essar vice-chairman Ravi Ruia will be the chairman of Vodafone Essar and Vodafone chairman Arun Sarin will be the vice-chairman. Max India chairman Analjit Singh and HEL MD Asim Ghosh will also be on the board.
The approval comes as a welcome reprieve to Mr Singh and Mr Ghosh, whose 12.26% shareholding in HEL has been under scrutiny since the deal was announced in February.
The Vodafone-HEL regulatory saga, which saw the proposal being deferred thrice by FIPB, began in February soon after Vodafone announced it had agreed to acquire companies that controlled 67% in HEL from Hutchison Telecom for $11.1 billion. This had given rise to a controversy about whether the 15% held by Mr Singh, Mr Ghosh and IDFC should be counted as FDI.
Read more in The Economic times article.
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