New Delhi, Jan 19 (PTI) Ruias-led Essar group today hitback at Vodafone for objecting to former''s plan to merge itstelecom holding company with another listed firm and said theBritish telecom giant has no locus standi to oppose it.
Vodafone-Essar is the third largest telecom serviceprovider with over 124 million subscribers. Vodafone has about67 per cent stake in the joint venture while Essar owms therest.
Essar has proposed to merge Essar TelecommunicationsHoldings Private Limited (ETHPL), which has 11 per cent stakein the joint venture Vodafone-Essar, with another listed firmIndia Securities Limited (ISL) in order to find Fair MarketValue of its stake."Vodafone has no locus standi to raise such objectionsto the merger since it is neither a shareholder nor a creditorof both ETHPL and ISL," ISL said in a filing to the stockexchange.
Vodafone had yesterday said that the Essar move coulddistort the valuation of the joint venture (Vodafone-Essar)and had written to both market regulator Sebi and the BombayStock Exchange expressing its concerns and asked for thematter to be examined.
"Vodafone is concerned that the value of IndiaSecurities Limited could be misinterpreted as a Fair MarketValue of Vodafone Essar," it had said in a statement.
Essar has contested Vodafone''s point about misinformationand said the shareholders of ISL have been "well informedabout the merger scheme with all details being adequatelydisclosed vide Explanatory Statement to the equityshareholders."
It (Essar) also said that the company has two put options-- underwritten put option and fair market value putoption--for divesting its stake in Vodafone-Essar to Vodafone.
The merger of ETHPL with ISL could give a fair marketvalue of Essar''s stake in the joint venture and the Indianfirm may use it while exercising its put option, which isvalid till May this year as per the agreement between the twopartners.