Tata Group chairman Cyrus Mistry today met Telecom Minister Manoj Sinha, terming it as a “courtesy call”.
The meeting assumes importance in the backdrop of the ongoing legal tussle between the Tatas and Japan’s NTT DoCoMo as well as the upcoming spectrum auction, which is scheduled to be held at the end of September.
After the meeting, which lasted for about 20 minutes, Mistry refused to comment on the proceedings of the meeting and said it was a “courtesy call” with the minister.
He declined to make any comments on the Tata Docomo issue.
NTT DoCoMo, in November 2008, had acquired 26.5 percent stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per share).
This was as per a understanding that in case the Japanese firm exits the venture within five years, it will be paid a minimum 50 percent of the acquisition price.
In April 2014, DoCoMo decided to exit the joint venture that 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 Japanese firm dragged Tata Group to international arbitration and won a $1.17 billion award. To honour that, an application was made to RBI seeking exemption from the foreign exchange Act.
RBI, in turn, wrote to the Finance Ministry for exemption from the rules, a step that would boost investor confidence. The Finance Ministry, however, turned down RBI plea. According to the ministry, its not only Tata-DoCoMo but many other legacy issues which will have to be given exemption if one case is allowed.