Vodafone to start due diligence on Hutch Essar-FT

SINGAPORE, Jan 8 (Reuters) Britain's Vodafone Group Plc is to begin due diligence on Monday on Indian mobile phone firm Hutchison Essar, the Financial Times reported, a move denied to rival suitors to its potential -19 billion bid.

By allowing Vodafone de facto exclusivity to pursue a deal, Hutchison Whampoa, the Hong Kong group that indirectly owns 67 percent of Hutchison Essar, is effectively burning its bridges with Essar, the minority 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 try to enforce its interpretation of a disputed shareholder agreement with Hutchison''.

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 DKS PM0632