The Department of Telecommunications (DoT) has obtained a stay from the Delhi High Court on the 2008 merger between Idea Cellular and Spice Communications, say news reports. Following this, Idea Cellular said that it plans to oppose this decision.
It is believed that the government had obtained the stay on the grounds that Idea had violated laws by holding more than 10 per cent stake in two companies operating in the same regions.
Idea holds overlapping mobile permits in six telecom circles after its acquisition of Spice Communications in October 2008. It is believed that DoT?s action of moving the Delhi High Court was backed by legal opinion from Additional Solicitor General Amarjit Singh Chandhiok.
The legal opinion had said that Idea was in violation of telecom rules, which prohibits a mobile phone company from holding more than 10 per cent stake in two companies operating in the same region. It added that Idea Cellular and Spice Communications also violated the April 2008 merger guidelines, which prohibited new entrants from selling stakes within three years of obtaining licences.
Idea Cellular responded by saying that it had announced its merger with Spice in June 2008 and DoT was given a copy of the press release with a detailed plan of the proposed merger. The company also said that over the past three years, it had updated DoT at every step through more than a score of letters and meetings.
It added that in July 2008, it had unconditionally offered to surrender overlapping licences if policy so required.
