Vodafone offers to stay away from Airtel board

Telecom giant Vodafone, a contender for acquiring Hutch-Essar, is believed to have offered that its two nominees will not participate in board meetings of Bharti-Airtel for fear of further straining already tense relations with its Indian partner, the Daily Telegraph reported today.

The UK mobile giant, which has about 10% stake in Bharti Airtel, would have to exit Bharti-Airtel and seek waiver of a one-year non-compete clause in the event of a successful acquisition of Hutch-Essar (HEL).

The report said Paul Donovan, who sits on the Bharti-Airtel board with fellow Vodafone director Gavin Darby, is understood to have written to founder Sunil Bharti Mittal this week.

In the letter, it is believed, Vodafone offered to remain absent from the company's next board meeting "out of courtesy".  Mittal's response is not known.

While Vodafone declined to comment, a spokesperson for Bharti Airtel in India said: "As a company policy, we do not comment on matters related to our shareholders." Arun Sarin, CEO of Vodafone, which is in the process of studying the books of its takeover target, visited India early this month to hold parleys with HEL officials and policy makers regarding its plans.

Early this week, Singapore's leading telecom operator Singtel, which holds about 31% stake in Bharti Airtel, said it would be interested in picking up Vodafone's stake in the Indian company, "...if the shares are offered...under the right terms and conditions."