Business Law : Delhi HC issues notices to Govt and 17 telecom companies
Posted on : 04 December 2008 by Y.Prakash [ Scorecard : 9848]
The Delhi High Court issued notices to Ministry of Communication, Information and Technology, Finance Ministry, Telecom Regulatory Authority and 17 others, including Telecom companies, to reply by January 14 about the allegations of having foreign companies in India which breech the norms of their existence here.Hearing a petition filed by an organisation Telecom watchdog, a bench comprising Chief Justice A P Shah and Justice S Murlidhar directed all the 21 respondents to file their response by the next date of hearing.Telecom Watchdog contended that Hong Kong based telecom company Essar Hutchison which can invest 74% as foreign investment has invested 15% extra in unknown names. The Vodafone company has declared that they have sold their shares to an Indian company.
Telecom Watchdog alleged that 15% shares were bought by Hutch through companies by using their names. The company had the entire hold over the unknown companies, therefore, they have violated the pre-condition of adhearing to the cap of 74% investment by the Foreign Institutional Investor’s (FII) as they have violated the basic condition of the licence given to them, hence their existence here in India is challenged.Watchdog has also urged the court to initiate cases under Foreign Exchange Management (FEMA) Act and unknown transactions act against such companies.Challenging the entire basis of the existence of the company, Watchdog also said Vodafone has sanctioned another Rs 2000 crore to get the company registered with Foreign Investment Promotion Board(FIPB) and for the legal expenses for fighting this case.The Court had earlier stayed the proceedings in the court for an indefinite period as the matter was referred to FIPB and awaited their findings.Watchdog says FIPB is not a statutory body, therefore, the court should consider the allegations on merits.
Mr Ashok Desai appearing on behalf of the telecom companies said the government has granted licences to the companies after verifying all the facts and FIPB’s findings should be considered by the court first.
