The Foreign Investment Promotion Board (FIPB) has, for the second time, deferred taking a decision on Vodafone’s application to acquire 51.96 per cent stake in Hutchison Essar Limited (HEL).

The Foreign Investment Promotion Board (FIPB) has, for the second time, deferred taking a decision on Vodafone’s application to acquire 51.96 per cent stake in Hutchison Essar Limited (HEL).

Instead, it has sought the law ministry’s views on the matter. The law ministry, in turn, has suggested the appointment of inspectors to investigate the actual ownership structure of HEL. While DoT has given a clean chit to the acquisition, the Reserve Bank of India (RBI) has suggested further investigations. The RBI has raised concerns that Vodafone’s acquisition could violate Foreign Exchange Management Act norms. This is because, if the stake held by Analjit Singh and Asim Ghosh in HEL is considered as foreign, the total foreign holding in HEL would cross the stipulated 74 per cent mark.