In a written communication to the Securities and Exchange Board of India (SEBI), Vodafone has requested a scrutiny of the tenfold rise in the shares of India Securities Limited (ISL) between January 2010 and January 2011, according to news reports. Prior to this, Vodafone had written to both the Bombay Stock Exchange (BSE) and SEBI expressing its concerns regarding the reverse listing of ETHPL (which owns an indirect 11 per cent stake in Vodafone Essar) into India Securities Limited and had requested a thorough scrutiny.
In 2007, Vodafone had acquired nearly 67 per cent stake in the company, while Essar has a little over 33 per cent equity in the joint venture. India Securities Limited (ISL) is a group firm of Essar and is listed on the bourses. Transfer of 11 per cent stake held by Essar Telecommunications Holdings to ISL will allow shareholders of ISL to participate in Vodafone Essar.
If carried through, Essar would know the fair (market) value of its 33.02 per cent stake, for which the company has the right to exercise the put option, a contract that gives the seller the right to sell a specified quantity of securities at an agreed price within a specified time period.
