Madras High Court clears Essar Tele-ISL merger, rejects Vodafone plea
21 Apr 2011
The Madras High Court today approved the merger of Essar Telecom Holdings with India Securities and rejected the plea of telecom giant Vodafone saying the UK firm has no locus standi to oppose the amalgamation.
Vodafone had objected to the scheme of amalgamation of Essar Telecom and India Securities saying that the merger would affect the ownership and valuation of its stake in Vodafone Essar Ltd.
Vodafone holds 51 per cent equity stake in Vodafone Essar Ltd while Essar holds 33 per cent stake in Vodafone Essar Ltd.
"The decision of the Madras High Court vindicates our earlier stand that Vodafone indeed did not have any locus standi in relation to this merger as it was neither a shareholder nor a creditor of the relevant companies. The objections filed by Vodafone were intended to delay the merger, and serve their own commercial interests to prevent the discovery of a fair market value of Vodafone through a market mechanism," Essar said in a statement.
Vodafone is disappointed that the Madras High Court did not feel it necessary to further investigate the merger.