The Essar Group is reportedly transferring part of its Indian holding in Vodafone Essar to its overseas investment company using the provisions of the relaxed foreign investment norms issued in 2009.

The Essar Group is reportedly transferring part of its Indian holding in Vodafone Essar to its overseas investment company using the provisions of the relaxed foreign investment norms issued in 2009. According to sources, the Essar Group will transfer its 49 per cent stake in Essar Telecommunications Holding, which holds 10.97 per cent in Vodafone Essar, to Mauritius-based Essar Telecom India for Rs 5.3 billion. The deal will result in the effective transfer of around 2.63 per cent of the Essar Group’s economic interest in Vodafone Essar. Under the new norms issued by the government in 2009, foreign investment of less than 50 per cent in an Indian investing company will not be treated as foreign direct investment (FDI) as long as Indian citizens have a 50 per cent stake and the right to appoint the majority of directors in the investing company.