Telenor has informed the Foreign Investment Promotion Board (FIPB) that it plans to increase its holdings in Unitech Wireless to 74 per cent and induct other resident Indian shareholders if its joint venture partner did not subscribe to the Rs 82.50 billion rights issue.
Telenor has a majority stake of 67.25 per cent in Unitech Wireless, which offers mobile services in India under the Uninor brand. Realty firm Unitech owns the rest.
Prior to this, the FIPB had given Unitech Wireless? proposal for a Rs 82.50 billion rights issue the go-ahead. The FIPB had cleared the proposal, despite the Department of Telecommunication (DoT) and the Ministry of Home Affairs asking for it to be deferred and the Department of Revenue also opposing the rights issue on the grounds of treaty shopping.
While the Ministry of Home Affairs had raised concerns about Telenor’s holding in Pakistan, DoT had wanted it to be deferred as Unitech Wireless was yet to get its approval for merging all its eight subsidiaries into a single entity.
When clearing the proposal, the FIPB said that the Department of Revenue?s objections were generic and could be overruled. It also said that no separate security clearance was required from the Ministry of Home Affairs for the rights issue.
The FIPB also asked DoT and the Ministry of Home Affairs to place their concerns before the Cabinet Committee of Economic Affairs (CCEA).
