Hong Kong-based Hutchison Telecom Limited is expected to submit details of loans to two Indian minority shareholders this week to the finance ministry, which is looking into alleged breach of foreign direct investment norms in Hutch-Essar.
This is required to clear the way for UK telecom giant Vodafone to complete the $11.1 billion acquisition of Hutch Essar Ltd, in which it (Vodafone) has bought controlling 52 per cent direct stake.
The Foreign Investment Promotion Board is likely to meet on April 23 to look into the loan details, which were sought by the board from HTIL to examine whether the individual shareholders -- Asim Ghosh and Max Group Chairman Analjit Singh -- were fronting for HTIL.
Ghosh and Singh hold 12.6 per cent stake in HEL, for which they had taken a loan that was backed by HTIL with a provision that the Hong Kong company can buy the stake at a later date on par value. This arrangement could lead to circumventing of the FDI limit.
However, Ghosh and Singh have told the FIPB that they were the actual owners of their joint 12.6 per cent stake and the Board has to examine the case.
Only after examining the reply from HTIL, FIPB will decide whether any FDI norm was violated, sources said, adding that a decision to recall HTIL, Ghosh and Singh again to FIPB would also depend upon HTIL's reply.
FIPB is still awaiting response from the law ministry and also the Reserve Bank, which is looking into Foreign Exchange Management Act and ECB compliance by HTIL.
