In a setback to telecom operator ByCell, the Foreign Investment Promotion Board (FIPB) has revoked its foreign collaboration (FC) approval to the Swiss company for obtaining telecom licence to start mobile services. The proposal involved an investment of over Rs 2,500 crore in in five circles across 13 states in the country.
The decision was taken during a meeting of the FIPB board on May 11 on the basis of withdrawal of security clearance form the Ministry of Home Affairs (MHA). The home ministry had raised objections over concerns regarding the original sources and channel of flow of funds.
ByCell Holding AG, Switzerland, holds 64.66 per cent in ByCell Telecommunications India, while its Indian partner Bitcorp Pvt Ltd holds 35.34 per cent. In 2007, the company had proposed to raise the foreign equity participations of 74 per cent amounting to $500 million in 3-5 years in the paid-up capital of the company.
Even while the company was issued the letter of intent (LoI) to operate in the country in 2008, the award of licence was withheld due to the objections raised. Addressing the objections, ByCell had proposed to change the equity structure of the company. However, the proposal was rejected.
Earlier this year, ByCell dragged the FIPB and DoT to court over the failure to grant the company a telecom licence.
The representative of the DoT had cited that an approval from the FIPB was required before the DoT could take a decision.
Alexandre Louzine, CEO, ByCell told Business Standard: “There has been no official communication to us on this matter. I have only read media reports. We are already fighting in court on this issue. Therefore, it would not be feasible to withdraw the approval before a judgment is given.”