The Department of Telecommunications (DoT) plans to ask the Ministry of Corporate Affairs to examine the dispute between the Tata Group and the Aditya Birla Group over Idea Cellular.
DoT is likely to ask the Ministry to examine if the Tata Group held more than 10 per cent stake in Idea Cellular and Tata Teleservices Limited simultaneously.
The issue began in 2006, when the Tata Group exited Idea Cellular by selling their 48 per cent stake in that company to the Aditya Birla Group. The Tata Group had to exit Idea Cellular after the Aditya Birla Group said that the former was violating cross-holding norms by holding equity stake in two different telecom companies.
According to DoT’s rules, a single entity cannot hold more than 10 per cent stake in two companies offering services in the same circle. Both Idea Cellular and Tata Teleservices had overlapping service areas, but the Tata Group had maintained that there were no common promoters in the two ventures with more than 10 per cent stake.
The Tata Group had stated that the Aditya Birla Group?s argument was baseless, as it relied on the premise that all Tata companies should be treated as a single group and not as individual companies.
According to DoT’s findings, the Tata Group held 50.95 per cent stake in Tata Teleservices. The Tata Group also held 28.69 per cent equity in Tata Industries Limited, which in turn held 31.69 per cent in Idea Cellular.
Tata Industries was holding 100 per cent stake in Apex Investment (Mauritius), which in turn held 16.45 per cent stake in Idea Cellular.
Prior to this, DoT had asked the Law Ministry to examine the matter. The Law Ministry had told DoT that since the issue related to equity holding, the case ought to be referred to the Ministry of Corporate Affairs.
