Vodafone objects Essar''s reverse listing of telecom holding co

New Delhi, Jan 18 (PTI) Vodafone has complained to marketregulator Sebi and the Bombay Stock Exchange about its partnerEssar''s plans to transfer 11 per cent stake to another listedgroup firm saying it was not disclosed by the Indian partner.

"Vodafone has written to both BSE and Sebi to express itsconcerns regarding reverse listing of Essar TelecommunicationsHoldings Private Ltd (which owns an indirect 11 per cent inVodafone-Essar) into India Securities Ltd and has asked forthe matter to be examined," Vodafone said in a statement.

Vodafone-Essar is the third largest mobile operator inIndia. Vodafone had aquired nearly 67 per cent stake in 2007while Ruias-led Essar have little over 33 per cent equity inthe joint venture.

India Securities Ltd (ISL) is a group firm of Essar andis listed on the bourses. Transfer of 11 per cent stake heldby Essar Telecommunications Holdings to ISL would allowshareholders of ISL to participate in Vodafone-Essar.

Essar is doing so to get to know the fair (market) valueof its 33.02 per cent stake, for which the company has theright to exercise the Put Option, a contract that gives theseller the right to sell a specified quantity of securities atan agreed price within a specified time period.

According to the foreign partner, "There has been nodisclosure to the shareholders of ISL on Vodafone Essar, whichwould become a substantial asset of ISL. Therefore, theinvestors in ISL have no basis on which to form a valuationjudgement."

It (Vodafone) also said that Essar Telecommunications''swholly-owned subsidiary has stated in its InformationMemorandum of September 2009 and January 2010 that it woulduse the proceeds from the bonds secured against Essar''s PutOption to invest internationally in sector like coal, steeland refining. .

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