The Ministry of Corporate Affairs (MCA) and the Ministry of Law and Justice (MLJ) have informed the Department of Telecommunications (DoT) that they will not comment on the Tata Group-Idea Cellular stake issue. DoT had asked both ministries to examine whether the Tata Group, which exited Idea Cellular in 2006 by selling their 48 per cent stake in that company to the Aditya Birla Group (ABG), had violated licence conditions that bar Indian companies from owning more than 10 per cent in telecom companies offering services in the same area.
Commenting on this, MLJ has said that the question pertaining to the equity holding of the companies is purely a question of fact, which has to be determined by DoT, from its records.
Similarly, MCA has told DoT that it does not have information on the shareholdings of the companies involved in the dispute to give its opinion. With regard to the alleged violations by the Tata Group, MCA has said that DoT must decide on the issue, in line with existing rules.
The dispute pertains to objections raised by ABG to the Tata Group?s presence in Idea Cellular, along with Tata Teleservices Limited. In February 2006, ABG had requested DoT to ask the Tata Group to either exit Idea Cellular or reduce their stake to less than 10 per cent. The company also alleged that the Tata group, which held stake in both Idea Cellular and Tata Teleservices Limited, was violating the licence conditions.
In April 2006, the Tata Group exited Idea Cellular by selling the group’s entire 48.14 per cent stake in Idea Cellular to ABG.
The Tata Group has denied these allegations. In their submissions to the government, they have stated that the entire argument of ABG was baseless as it relied on the premise that all Tata companies should be treated as a single group and not as individual companies.
