U.S. News

India Defers Decision on Vodafone's Hutch Essar Acquisition


India's foreign investment approval body has deferred a decision on Vodafone's plan to buy Hutchison Telecom's share in Indian mobile carrier Hutchison Essar, a senior official said
on Thursday.

The Foreign Investment Promotion Board (FIPB) had sought more details about the deal, Ashok Jha, finance secretary, told reporters after a FIPB meeting. This is the second time the board has deferred the decision.

Last month, Hong Kong-based Hutchison Telecommunications International (HTIL) agreed to sell a majority stake in Hutchison Essar -- India's fourth-largest carrier -- to Britain's Vodafone for $11.1 billion.

India allows foreign ownership of up to 74% in a domestic telecom firm and media have reported that the authorities are looking into the ownership structure of Hutchison's stake, which includes some shares held by local partners.

HTIL controlled 67% in the Hutch Essar joint venture, with India's Essar Group holding the rest. Two-thirds of the Essar Group's 33% stake is held overseas, which counts as foreign holdings.

In Jakarta on Thursday, HTIL chief Dennis Liu said the company was in full compliance with Indian regulations and it should not take too long for the sale to Vodafone to be concluded.

On Wednesday, a spokesman for Vodafone said the company expected to close the deal in the second quarter as originally expected.