Vodafone to start due diligence on Hutch Essar

Singapre, Jan 8: Britain's Vodafone Group Plc is to begin duediligence on Monday on Indian mobile phone firm Hutchison Essar, theFinancial Times reported, a move denied to rival suitors to itspotential -19 billion bid.

By allowing Vodafone de facto exclusivity to pursue a deal,Hutchison Whampoa, the Hong Kong group that indirectly owns 67 percentof Hutchison Essar, is effectively burning its bridges with Essar, theminority shareholder, the FT said.

Conglomerate Essar also wants to buy the two-thirds of the mobile phone company it does not already own.

The FT said Essar was now ''almost certain to go to court to tryto enforce its interpretation of a disputed shareholder agreement withHutchison''.

The 67 percent stake is formally held by Hutchison Telecommunications International .

Another potential buyer, Reliance Communications Ltd. , has also been denied access to the books, the FT said.

It said Vodafone had appointed Ernst&Young to help it conduct the due diligence.

Reuters>