INDIA BUSINESS WORLD - APRIL - MAY 2007
The Month that was ...

VODAFONE ACQUIRES MANAGEMENT CONTROL OF HUTCH ESSAR

VODAFONE cleared its last hurdle in acquiring a controlling stake in Hutch Essar with finance minister P Chidambaram giving his go-ahead on May 4. 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. When contacted, Mr. Singh said:" It is an outstanding development for India and sends the right kind of signals that we need to give the rest of the world about the integrity of the Indian regulatory process. At a personal level, I am delighted that our standing regarding Asim and my shareholding has been upheld and respected.''

On his part, Mr. Ghosh said: "I do not want to pre-empt any official communication, but if this is true, then it is a symbol of India's arrival on the world stage. One of the largest M&A deals in Asia involves an Indian company. This is something we all should be proud of."