Tatas accused of multiple breach of licence

The Aditya Birla group has told the department of telecom that the Tata Group is involved in multiple breach of licence with regard to Idea Cellular in as many as seven telecom circles and not just in Delhi Circle as claimed by the Tatas.

The circles where the Birlas have alleged violation by the Tatas include Madhya Pradesh, Kerala, Haryana, Uttar Pradesh (West), Uttar Pradesh (East), Rajasthan and Himachal Pradesh.

The Aditya Birla Group contended that Idea Cellular had been operating in Madhya Pradesh since December 2001 through its subsidiary, while Tata Teleservices (TTSL) obtained a Universal Access Licence for the same service area only in April 2004.

As per regulatory norms, a company must not be subject to competition from its own promoters and equity holders which have over 10% stake in another company in the same circle.

The Birlas added that while the Tata Industries' share-holding in TTSL was brought to below 10 per cent by transfer of its shares to other Tata group companies before the licence for MP was obtained, "such intra-group transfer had no impact on the Tata Group's actual shareholding and its promoter stake and share and status in TTSL."

Further, the Birlas said the then promoters of Idea Cellular had signed an MoU with the Escorts Group on October 30, 2003, for acquisition of the latter's mobile services in Kerala, Haryana, UP (West and East), Himachal Pradesh and Rajasthan by Idea Cellular.

The Tatas had applied for licence for these circles on January 30, 2004, which came at the same time when Idea was in the process of completing its acquisition.

"Compliance with licence terms is not a one-time condition that needs to be observed only at the time of acquisition of a licence but is an ongoing obligation through the subsistence of the licence," they added.

The relevant fact is that actions and multiple holdings of the Tata group have resulted in non-compliance with the licences of Idea and its subsidiaries as well as the licences of TTSL, and the responsibility for rectifying the breaches is on the Tata Group," they added.