Tatas to drag DoT to court on FDI hike

Tata Teleservices (Maharashtra) Ltd (TTML) may move court against the Depatment of Telecommunications (DoT) decision to raise the foreign direct investment (FDI) ceiling in telecom to 74 per cent from 49 per cent.

TTML, in a letter to its shareholders, said that DoT has unilaterally amended certain conditions of unified access service licences (UASL) issued to the company and other operators.

These amendments have been made applicable even to those licencee companies "which do not have or wish to have FDI exceeding 49 per cent of the total paid-up equity capital".

DoT has asked telecom companies to make amendments in their articles of association, in a bid to accommodate the proposed rise in FDI structure.

Tata group's other telecom companies - Videsh Sanchar Nigam Ltd (VSNL) and Tata Teleservices Ltd (TTSL) - may also challenge the DoT order, sources said.

"We made representations to various government departments stating that this is a unilateral decision, even as we had sought more time to comply with the regulations. However, if DoT is not relenting we may have to take the matter to court," sources said.

The government had raised the FDI ceiling in telecom to 74 per cent from the present 49 per cent and had asked telecom companies to make amendments in their memorandums of association or articles of association.

A transition period of four months was given for this purpose. TTML had also requested the government not to apply the provisions of press note to companies which do not wish to enhance FDI beyond 49 per cent.

Meanwhile, the listed telecom companies of the group - VSNL and TTML - have convened extraordinary general meetings (EGM) on March 1 and March 2, respectively, to seek shareholder's approval for making amendments in their articles of association.