Bharti airtel, which operates through a joint venture with the Telecommunications Consultants India Limited (TCIL) in the Rajasthan circle, has denied a dividend to TCIL, despite generating profits for several years.
Bharti Hexacom Limited, in which Bharti owns 70 per cent stake and TCIL 30 per cent, had earned a net profit of over Rs 7 billion in 2009-10 and its profit is likely to have been around Rs 6.50 billion last fiscal. TCIL, which has invested over Rs 1.06 billion in Bharti Hexacom since 1995, has not received any returns so far.
A dividend has been denied on the grounds that Bharti Hexacom Limited was using all internal generations for network expansion, to keep pace with competition.
Previously, TCIL had also sought listing of the joint venture, but this proposal was rejected as the company did not have enough voting power on the board of the joint venture. Bharti had rejected the proposal for listing the joint venture, saying its flagship company was already listed on the bourses and as per company rules, no subsidiary would be listed on a standalone basis.
In fact, Bharti had given TCIL the option to list its 30 per cent equity portion to arrive at a market price which could be used for selling its stake. To this, TCIL said that it was for the company (the majority 70 per cent stakeholder) to get the correct valuation from the market.
