Seeking to steer clear of the ongoing $1.17 billion Tata-DoCoMo payment dispute, a top official today said the government has no role to play as it can’t “change the rule to suit the convenience of somebody” in a case that is based on agreement between two private parties “The government has no role in it (Tata-DoCoMo dispute).
It was a bilateral agreement between two parties. We can not change the rule to suit the convenience of somebody…,” said a top Finance Ministry official.
“The agreement was the violation of the FEMA rule. Both of you decided to enter into an agreement, you can not expect government to change its rule to suit your requirements. If small guy comes, will anybody talk about them. It is for now them to sort it out,” he said.
NTT DoCoMo in 2008 acquired 26.5 per cent stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per share). This was as per understanding that in case it exits the venture, it will be paid a minimum 50 per cent of the acquisition price.
When DoCoMo decided to exit the joint venture, which struggled to grow subscribers quickly, it sought Rs 58 per share or Rs 7,200 crore from the Tatas. But the Indian Group offered Rs 23.34 a share in line with RBI guidelines which state that an international firm can only exit its investment at a valuation “not exceeding that arrived at on the basis of return on equity”.
The Finance Ministry had rejected a plea for exempting Tata-DoCoMo deal from the foreign exchange act, saying that the two firms had entered into a share buyback contract in contravention of prevalent law and the case would have to be settled legally.
In June this year, a London tribunal LCIA ordered Tata Sons to pay DoCoMo a sum of $1.17 billion in compensation for breaching agreement on the India joint venture.
The Japanese firm has filed a plea in the Delhi High Court seeking enforcement of the arbitration ruling. Tata Sons has deposited the entire amount of $1.17 billion with the registrar of the Delhi High Court which is hearing the matter.