The Foreign Investment Promotion Board did not take up British telecom major Vodafone's Rs 10,141 crore (Rs 101.41 billion) proposal to buy out minority shareholders in its Indian arm.
"All ministries and departments concerned did not give their comments, so it (Vodafone proposal) was not taken up," an official said after the FIPB meeting.
The Department of Telecom, Department of Industrial Policy and Promotion, Ministry of Home Affairs, Ministry of External Affairs and the Department of Economic Affairs had to give their comments on the proposal, sources said.
The plan will be considered at the next FIPB meeting, for which the date has yet to be finalised, the official said.
CGP India Investments Ltd, an indirect Mauritian subsidiary of Vodafone International Holdings BV, had sought the approval from FIPB headed by Economic Affairs Secretary Arvind Mayaram to buy the stake held by minority shareholders in Vodafone India Ltd.
The UK-based telecom major holds a 64.38 per cent stake in the Indian unit.
Approval of the Cabinet Committee on Economic Affairs is also needed for the proposal because the planned investment exceeds Rs 1,200 crore (Rs 12 billion).
The government in August relaxed rules to allow foreign telecom companies to own 100 per cent of their businesses in India. Earlier, the FDI cap in the sector was 74 per cent.
Vodafone's minority investors include billionaire industrialist Ajay Piramal, who holds an 11 per cent stake in India's second-largest telecom company by subscribers.
The remaining stake in Vodafone India is with undisclosed minority shareholders. Analjit Singh, Vodafone India's non-executive chairman, is understood to be among them.
"The total inflow of foreign investment into India as a result of the proposed transactions will be approximately Rs 10,141 crore. Following the completion of these transactions, Vodafone will also consider providing additional funding to VIL by subscribing to equity shares of VIL," Vodafone had said earlier.
Vodafone, which entered India in 2007 by buying Hutchison Whampoa's stake in Hutchison-Essar Ltd in a $11 billion deal, directly holds 64.38 per cent stake in Vodafone India.
The telecom major was slapped with a tax liability of over Rs 11,200 crore (Rs 112 billion), along with interest, for the 2007 acquisition and is in discussions with the government to resolve the issue.
© 2024 Rediff.com -