Vodafone confident of FDI compliance

 In the absence of these documents, essential to establish the fact that these minority shareholders are not fronting for HTIL, FIPB has deferred the decision on whether Vodafone's acquisition of Hutch-Essar exceeded the 74% FDI cap.

 It is alleged that last year, HTIL hiked its holding by 12.26% in Hutch-Essar by buying out the Kotak stake, but due to regulations it routed the investment through Asim Ghosh and Analjit Singh.

 FIPB is looking into the allegation that to execute these transactions, both Ghosh and Singh formed three firms each.
Hutch used its credit facilities of $124.5 million and $200 million for arranging two loans of Rs 489 crore and Rs 792 crore respectively for Ghosh and Singh to buy the entire stake of Kotak group. While Ghosh brought 4.68%, Analjit Singh purchased 7.58% stake.

 RBI will examine whether these loan agreements between HTIL and Ghosh-Singh duo violated any FEMA or ECB guidelines, and the FIPB would look into whether the stake purchase by Singh and Ghosh violated FDI cap of 74% in telecom sector, the official said.