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Report Date : |
04.07.2011 |
IDENTIFICATION DETAILS
|
Name : |
AEGIS LIMITED (w.e.f.29.10.2008) |
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Formerly Known
as : |
AEGIS BPO SERVICES LIMITED |
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Registered
Office : |
Essar Home, 11, K K Marg, Mahalaxmi, Mumbai – 400034, |
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Country : |
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Financials (as
on) : |
31.03.2010 |
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Date of Incorporation
: |
07.01.1992 |
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Com. Reg. No.: |
11-064767 |
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Capital
Investment / Paid-up Capital : |
Rs.2465.390
Millions |
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CIN No.: [Company Identification
No.] |
U99999MH1992PLC064767 |
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TAN No.: [Tax Deduction & Collection
Account No.] |
MUMA29517F |
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PAN No.: [Permanent Account No.] |
AAACE8354Q |
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Legal Form : |
A closely held public limited liability company. |
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Line of Business
: |
Call Centre and BPO |
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No. of Employees
: |
36000 (Approximately) |
ECGC Country Risk Classification List – April 1, 2010
|
Country Name |
Previous Rating (31.12.2009) |
Current Rating (01.04.2010) |
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A1 |
A1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
LOCATIONS
|
Registered Office : |
Essar Home, 11, K K Marg, Mahalaxmi, Mumbai – 400034, |
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Tel. No.: |
91-22-66601100 |
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Fax No.: |
91-22-23544490 |
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E-Mail : |
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Website : |
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Branches : |
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DIRECTORS
As on 15.11.2010
|
Name : |
Mr. Anshuman Shashikant Ruia |
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Designation : |
Director |
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Address : |
67-A, |
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Date of Birth/Age : |
11.03.1971 |
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Date of Appointment : |
22.12.2005 |
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DIN No. : |
00008501 |
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Name : |
Mr. Aparup Sengupta |
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Designation : |
Managing Director |
|
Address : |
104/105, 2B Garden Enclave, |
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Date of Birth/Age : |
20.08.1964 |
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Date of Appointment : |
01.08.2006 |
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DIN No. : |
00031274 |
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Name : |
Mr. John Michael Lind |
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Designation : |
Director |
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Address : |
515, VIA Sinuosa |
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Date of Birth/Age : |
11.02.1965 |
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Date of Appointment : |
19.01.2010 |
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DIN No. : |
01516635 |
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Name : |
Mr. Dilip Jayantilal Thakkar |
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Designation : |
Director |
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Address : |
Little |
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Date of Birth/Age : |
01.10.1936 |
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Date of Appointment : |
19.01.2010 |
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DIN No. : |
00007339 |
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Name : |
Mr. Debashis Chatterjee |
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Designation : |
Director |
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Address : |
Indian Institute of Management, Kozhikode, IIMK Campus (Post),
Kunnamangalam, Kozhikode – 6373570, |
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Date of Birth/Age : |
05.09.1964 |
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Date of Appointment : |
19.01.2010 |
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DIN No. : |
02874723 |
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Name : |
Mr. Vikas Saraf |
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Designation : |
Director |
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Address : |
2B, Saker Apartment, 71, |
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Date of Birth/Age : |
18.12.1968 |
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Date of Appointment : |
01.11.2002 |
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DIN No. : |
00055579 |
KEY EXECUTIVES
|
Name : |
Mrs. Shruti Anilkumar Jain |
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Designation : |
Secretary |
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Address : |
20/6, Mehta House, |
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Date of Birth/Age : |
04.03.1982 |
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Date of Appointment : |
21.03.2007 |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 15.11.2010
Equity Shares :
|
Names of Shareholders |
|
No. of Shares |
|
Essar Services Holdings Limited ( |
|
170356100 |
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Essar Services Holdings Limited Jointly with |
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4 |
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Essar Services Holdings Limited Jointly with B. |
|
4 |
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Essar Services Holdings Limited Jointly with A Mohanan, |
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4 |
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Essar Services Holdings Limited Jointly with Shah |
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4 |
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Essar Services Holdings Limited Jointly with |
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4 |
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Essar Services Holdings Limited Jointly with |
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4 |
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Arya Infrastructure Holdings Limited, |
|
6543568 |
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Global Vantedge Mauritius Limited, |
|
68621756 |
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Globe Vantedge Bermuda (Nominee of GVM), |
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4 |
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Swift Response Incorporation, |
|
1016564 |
|
Ansuman Ruia |
|
1000 |
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Total |
|
246539016 |
As On 15.11.2010
|
S. No. |
Category |
Percentage |
|
1 |
Foreign holdings( Foreign institutional
investor(s), Foreign companie(s) Foreign financial institution(s),
Non-resident Indian(s) or Overseas Corporate bodies or Others |
100.00 |
|
|
Total |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Call Centre and BPO |
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Products : |
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GENERAL INFORMATION
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No. of Employees : |
36000 (Approximately) |
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Bankers : |
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Facilities : |
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Banking
Relations : |
-- |
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Auditors : |
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Name : |
S.R. Batliboi and Company Chartered Accountant |
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Address : |
Jalan Mill Compound, 95, Ganpatrao Kadam Marg, Lower Parel, Mumbai –
400013, |
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Subsidiary Company : |
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Holding Company : |
Essar Services Holdings Limited ( |
CAPITAL STRUCTURE
As on 31.03.2010
Authorised Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
9980000000 |
Equity Shares |
Rs.10/- each |
Rs. 99800.000 Millions |
|
20000000 |
Preference Shares |
Rs.10/- each |
Rs. 200.000 Millions |
|
|
Total |
|
Rs.100000.000
Millions |
Issued, Subscribed & Paid-up Capital :
|
No. of Shares |
Type |
Value |
Amount |
|
|
|
|
|
|
246539016 |
Equity Shares |
Rs.10/- each |
Rs.2465.390
Millions |
As on 15.11.2010
Authorised Capital : Rs.100000.000 Millions
Issued, Subscribed & Paid-up Capital : Rs.2702.369 Millions
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE SHEET
|
SOURCES OF FUNDS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
SHAREHOLDERS FUNDS |
|
|
|
|
|
1] Share Capital |
2465.390 |
616.345 |
375.810 |
|
|
2] Share Application Money |
0.000 |
0.000 |
171.554 |
|
|
3] Share Capital to be Issued |
137.737 |
0.000 |
0.000 |
|
|
4] Reserves & Surplus |
5822.650 |
5799.041 |
2881.258 |
|
|
5] (Accumulated Losses) |
0.000 |
0.000 |
(213.119) |
|
|
NETWORTH |
8425.777 |
6415.386 |
3215.503 |
|
|
LOAN FUNDS |
|
|
|
|
|
1] Secured Loans |
2066.302 |
492.911 |
292.360 |
|
|
2] Unsecured Loans |
22.000 |
4.382 |
122.283 |
|
|
TOTAL BORROWING |
2088.302 |
497.293 |
414.643 |
|
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DEFERRED TAX LIABILITIES |
0.000 |
0.000 |
0.000 |
|
|
|
|
|
|
|
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TOTAL |
10514.079 |
6912.679 |
3630.146 |
|
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APPLICATION OF FUNDS |
|
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|
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|
|
|
|
|
|
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FIXED ASSETS [Net Block] |
1486.260 |
892.896 |
537.041 |
|
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Capital work-in-progress |
343.566 |
12.808 |
129.959 |
|
|
|
|
|
|
|
|
INVESTMENT |
5120.861 |
5119.651 |
2355.432 |
|
|
DEFERREX TAX ASSETS |
51.437 |
0.000 |
0.000 |
|
|
|
|
|
|
|
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CURRENT ASSETS, LOANS & ADVANCES |
|
|
|
|
|
|
Inventories |
0.000
|
0.000
|
0.000 |
|
|
Sundry Debtors |
2702.928
|
817.049
|
868.626 |
|
|
Cash & Bank Balances |
589.405
|
29.309
|
85.307 |
|
|
Other Current Assets |
416.744
|
1.803
|
0.000 |
|
|
Loans & Advances |
2506.191
|
662.713
|
399.548 |
|
Total
Current Assets |
6215.268
|
1510.874
|
1353.481 |
|
|
Less : CURRENT
LIABILITIES & PROVISIONS |
|
|
|
|
|
|
Sundry Creditors |
|
119.799 |
572.741 |
|
|
Other Current Liabilities |
2613.844
|
579.179
|
147.939 |
|
|
Provisions |
142.690
|
44.371
|
25.087 |
|
Total
Current Liabilities |
2756.534
|
623.550
|
745.767 |
|
|
Net Current Assets |
3458.734
|
887.324
|
607.714 |
|
|
|
|
|
|
|
|
MISCELLANEOUS EXPENSES |
53.221 |
0.000 |
0.000 |
|
|
|
|
|
|
|
|
TOTAL |
10514.079 |
6912.679 |
3630.146 |
|
PROFIT & LOSS
ACCOUNT
|
|
PARTICULARS |
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
|
|
SALES |
|
|
|
|
|
|
|
Income |
8376.570 |
3847.788 |
2672.164 |
|
|
|
Other Income |
128.221 |
162.461 |
9.933 |
|
|
|
TOTAL (A) |
8504.791 |
4010.249 |
2682.097 |
|
|
|
|
|
|
|
|
Less |
EXPENSES |
|
|
|
|
|
|
|
Personnel Expenses |
3608.282 |
2144.127 |
1518.288 |
|
|
|
Operating and other expenses |
2786.284 |
1137.080 |
899.282 |
|
|
|
TOTAL (B) |
6394.566 |
3281.207 |
2417.570 |
|
|
|
|
|
|
|
|
Less |
PROFIT
BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) I |
2110.225 |
729.042 |
264.527 |
|
|
|
|
|
|
|
|
|
Less |
FINANCIAL
EXPENSES (D) |
187.368 |
63.931 |
79.880 |
|
|
|
|
|
|
|
|
|
|
PROFIT
BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E) |
1922.857 |
665.111 |
154.647 |
|
|
|
|
|
|
|
|
|
Less/ Add |
DEPRECIATION/
AMORTISATION (F) |
395.925 |
213.224 |
152.340 |
|
|
|
|
|
|
|
|
|
|
PROFIT BEFORE TAX
(E-F) (G) |
1526.932 |
451.887 |
32.307 |
|
|
|
|
|
|
|
|
|
Less |
TAX (I) |
174.604 |
11.227 |
10.374 |
|
|
|
|
|
|
|
|
|
|
PROFIT AFTER TAX
(G-I) (J) |
1352.328 |
440.660 |
21.933 |
|
|
|
|
|
|
|
|
|
Add |
PREVIOUS
YEARS’ BALANCE BROUGHT FORWARD |
227.542 |
(213.118) |
(235.051) |
|
|
|
|
|
|
|
|
|
|
BALANCE CARRIED
TO THE B/S |
1579.870 |
227.542 |
(213.118) |
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share (Rs.) |
5.48 |
9.09 |
(0.46) |
|
KEY RATIOS
|
PARTICULARS |
|
31.03.2010 |
31.03.2009 |
31.03.2008 |
|
PAT / Total Income |
(%) |
15.90
|
10.99
|
0.81 |
|
|
|
|
|
|
|
Net Profit Margin (PBT/Sales) |
(%) |
18.23
|
11.74
|
1.20 |
|
|
|
|
|
|
|
Return on Total Assets (PBT/Total Assets} |
(%) |
19.83
|
18.80
|
1.70 |
|
|
|
|
|
|
|
Return on Investment (ROI) (PBT/Networth) |
|
0.18
|
0.07
|
0.01 |
|
|
|
|
|
|
|
Debt Equity Ratio (Total Liability/Networth) |
|
0.57
|
0.17
|
0.36 |
|
|
|
|
|
|
|
Current Ratio (Current Asset/Current Liability) |
|
2.25
|
2.42
|
1.81 |
LOCAL AGENCY FURTHER INFORMATION
FORM : 8
|
Corporate
identity number of the company |
U99999MH1992PLC064767 |
|
Name of the
company |
AEGIS LIMITED |
|
Address of the
registered office or of the principal place of business in |
Essar House 11K K
Marg, Mahalxmi, Mumbai – 400034, |
|
This form is for |
Creation of
Charge |
|
Type of charge |
Movable property |
|
Particular of
charge holder |
Axis Bank
Limited, |
|
Nature of
instrument creating charge |
Composite
Hypothecation Deed |
|
Date of
instrument Creating the charge |
09.10.2010 |
|
Amount secured by
the charge |
Rs. 940.000
millions |
|
Brief of the
principal terms an conditions and extent and operation of the charge |
Rate of Interest : MARGIN + LIBOR Terms of Repayment : 14 Quarterly Installments
of USD 1.57 Millions after 18 months from the date of Disbursement Margin : Not at any time
less than 1.25 Extent and Operation of the charge : First ranking
pari passu charge of present and future movable fixed assets and second ranking
present and future current assets. More particularly
covered in page 3 and 4 of the attachment. |
|
Short Particulars
of the property charged |
Movable fixed
assets both present and future, more elaborately described in schedule II of
the attachment |
Fixed Assets :
- Lease Hold
Improvement
- Office
Equipment
- Computers
- Software
- Furniture and
Fixtures
- Vehicles
- Vehicle –
Finance Lease
- Computers –
Finance Lease
PRESS RELEASES:
AEGIS BAGS THE CONTACT CENTER SERVICES
PROVIDER OF THE YEAR 2011 AWARD BY FROST AND SULLIVAN
June
17, 2011
Awarded at the
annual Frost and Sullivan Asia Pacific ICT Awards held in Singapore
Mumbai,
India: Aegis Limited, a leading global business process outsourcing (BPO)
provider and part of the Essar Group, announced that it has been recognized as
the Contact Center Outsourcing Services Provider of the Year 2011 by global
consulting firm Frost and Sullivan. The award was presented at Frost and
Sullivan’s annual Asia Pacific Information and Communications Technology (ICT)
Awards held in Singapore.
The
Frost and Sullivan Awards are presented to companies that demonstrate best
practices in their industry, commending diligence, commitment, and innovative
business strategies required to advance in the global marketplace. The 2011
Frost and Sullivan Asia Pacific ICT Awards recognized companies and individuals
that have pushed the boundaries of excellence — rising above the competition
and demonstrating outstanding performance across the Asia Pacific region.
Acknowledging
this recognition, Sandip Sen, President (Americas) and Global Chief Marketing
Officer, Aegis Limited, said, “The Frost and Sullivan award acknowledges
Aegis’s judicious growth strategy and culture of innovation. It goes well
beyond delivery excellence to being a balance sheet partner for our customers,
providing improved end user experience and associated business transformation.”
With
over two decades of leadership in managing customer lifecycle, Aegis’s contact
centers focus on enhancing end user experience and thereby improving customer
lifetime value of a brand. Aparup Sengupta, Managing Director and Global CEO,
Aegis Limited, added: “Contact centers are instrumental in getting an effective
and efficient fit between a brand's business objectives and its consumers'
expectations.”
The
awards are selected by a distinguished panel of judges comprising senior
executives from the industry including CIOs, CTOs and Frost and Sullivan
analysts. For more information, please visit www.ict-awards.com
About
Aegis
is a world-leading outsourcing services partner for more than 150 clients, with
over two decades of leadership in total customer lifecycle management. The
company has more than 50,000 employees across 50 locations, with a presence in
12 countries, serving verticals such as BFSI, telecom, healthcare, travel and
hospitality, consumer goods, retail and technology. The company specializes in
tailormade solutions that cover the entire spectrum of customer and business
experiences — across business processing, technology, and shared services — and
offers customized engagement models to further facilitate the ease of doing
business. Aegis is wholly owned by the Essar Group — a US$15 billion conglomerate.
For more information, please visit www.aegisglobal.com.
ESSAR FIGHTS VODAFONE'S 'CRIME' TAG
Agencies Posted online: Fri Jan 21 2011, 18:10 hrs
New Delhi : Ruias-led Essar Group today launched a scathing
attack on Vodafone saying that the British company is trying to gain 100 per
cent control of the telecom JV Vodafone-Essar at an "artificially
depressed value".
A day after Vodafone complained to market regulator Sebi to probe
allegations of insider trading (scam) in India Securities Limited, a listed
company of Essar group, Ruias said the British company's allegations are
baseless.
Essar has proposed to merge Essar Telecommunications Holdings Private
Limited (ETHPL), which has 11 per cent stake in Vodafone-Essar, with India
Securities Limited in order to find out Fair Market Value of its stake in the
joint venture.
Vodafone-Essar is the third largest telecom operator in India with over
124 million mobile subscribers. Vodafone had bought nearly 67 per cent stake
from Hutchison in 2007 while Essar holds the remaining stake.
"The merger scheme between India Securities Ltd and ETHPL is fully
compliant with all applicable Indian laws, capital and financial sector
regulations," Essar said in a statement.
Vodafone, which has sought to intervene in the proceedings governing the
merger scheme in the Madras High Court, is neither a shareholder nor a creditor
of any of these companies and has no legal capacity to challenge this merger,
it said.
Vodafone had objected to the merger saying it would distort the
valuation of the joint venture.
"It's (Vodafone's) objections to the merger are motivated and
factually incorrect. The purpose behind raising these objections is to prevent
the discovery of the fair market value of Vodafone-Essar, as envisaged in the
agreements between Vodafone and Essar," Essar said.
Last year when the Essar group wanted to list Vodafone Essar by offering
its shares through an Initial Public Offer, Vodafone ensured that the IPO did
not go through and no market value could be established, Essar said.
Vodafone, Ruias said, is attempting to force Essar out of joint venture
(JV) and own 100 per cent of the Vodafone-Essar at an artificially depressed
value. The court process is being sought to be abused through the attempt to
intervene and file objections.
The fair market value under agreements with Vodafone has to be
determined by three international investment banks. If the market value being
discovered by the merger were to be manipulated and artificial, as Vodafone
claims, the investment banks would naturally ignore that value when making
their determination, Essar said.
"The investment banks are under no obligation to use the listed
value alone. If, on the other hand, as we believe, the market value being
discovered is fair and reasonable then naturally the banks would take that into
account," it added.
Vodafone is trying to divert attention from crucial issues and has,
therefore, levelled baseless allegations of insider trading and inadequate
disclosure, Essar said.
Under the agreements with Vodafone, Essar has two options - first, it
can choose to sell its entire shareholding to Vodafone for USD 5 billion or
second, it can choose to sell part of its shareholding at the fair market
value.
"All that Essar is interested in doing is to enable the discovery
of the true market value of the company so it can make a proper choice as it is
entitled to do under its agreements with Vodafone," it said.
The reports of a stock 'scam' by Essar emerged yesterday when Vodafone
approached the market watchdog.
2G SCAM: CBI TO
QUESTION ESSAR CEO PRASHANT RUIA
NDTV Correspondent, May 11, 2011 (New Delhi)
Essar Group CEO Prashant Ruia will appear before the CBI in connection with the
ongoing 2G spectrum scam. Mr. Ruia will be questioned for a second time.
Mr. Ruia will be asked whether Loop Telecom is a front company for Essar.
Indian laws prohibit telecom companies from owning more than 10 per cent in
another telecom company. Essar, which had a joint venture with Vodafone for
mobile services in the country, was reportedly in violation of this rule as far
as Loop Telecom is concerned.
However, Essar has claimed that its stake in Loop at the time of application of
2G licenses was only 2.15 per cent and subsequently it came down to 1.5 per
cent.
Loop Telecom got licenses in January 2008 when A Raja was the Telecom Minister.
CBI SUMMONS ESSAR
GROUP'S PRASHANT RUIA IN 2G SCAM
The Central Bureau of Investigation (CBI) continues to tighten its noose around the 2G scam controversy. After questioning ADAG chief Anil Ambani on Wednesday, the CBI on Thursday summoned Essar Group CEO Prashant Ruia in relation to 2G scam investigation. He has been spotted at the CBI headquarters, reports CNBC-TV18’s economic policy editor Siddharth Zarabi.
The reason: On account of Essar’s links with Loop Telecom. The CBI wants to go into the links between Loop Telecom as well as Essar; there are allegations that Essar violated crossholding norms. Telecom operators are allowed to hold a crossholding of more than 10% and that is perhaps what the CBI wants to look into. It is interesting because on Wednesday we saw Anil Ambani at the CBI Headquarters perhaps for a similar reason to find out the links between the Reliance ADAG pack as well as Swan Telecom.
Clearly it is Day 2 of high profile visits at the CBI headquarters in New Delhi. This would be the fifth senior executive of a telecom company of a new licensee post 2008 who has arrived at the CBI headquarters for questioning following summons from the CBI.
A recap
Prashant Ruia is the Group CEO of the Essar Group. He is the son of one of the founding brothers Shashi Ruia. And the case here has to do with Loop Telecom. This was one of the nine companies that won licenses in the now infamous January 10, 2008 auction and the specific allegation that has been doing the rounds since the last two and a half years has to pertain with the alleged violation of 10% crossholding norm in Loop Telecom again a sort of arraignment similar to that what we saw with Swan.
Loop Telecom was the entity that was originally floated by the Essar Group. It held a sort of a direct equity and indirect equity. It extended a significant loan to Loop Telecom and the instrument for that, according to Essar, in the past is that it is not recognised as equity under the Indian Companies Act. And, therefore, several parallels and similarity with that of Swan Telecom, the entity is of course also very interestingly named Santa Trading was one of these companies and there is an overseas inflow of funds also into this company.
Loop Telecom originally started off as BPL Mumbai and it also won spectrum on a nationwide basis on January 10, 2008, clearly something that was unexpected. The details of that company’s operational performance are known through what the TRAI has said. In fact the TRAI has recommended cancellation of Loop Telecom’s licenses and therefore the CBI, just like in the past, would be focusing on the company’s structure of Loop Telecom pre-award of license and whatever changes that may have taken place subsequently.
The Supreme Court has directed the bureau to go after beneficiaries of the 2G scam. Following this the CBI summoned several executives from the sector (including Unitech MD Sanjay Chandra and DB Group chairman Vinod Goenka) to answer questions regarding a probe into whether there were any irregularities in the sale of lucrative licences below market prices in 2007-2008. A former telecoms minister has been arrested over the case as has a senior executive of one of the companies in question.
ESSAR CEO QUIZZED BY CBI ON 2G SCAM
(Reuters) - The
chief executive of Essar Group, one of India's biggest business houses, was
called for questioning by investigators looking into a widening telecoms corruption
probe that has battered the government.
Prashant Ruia, whose
company has interests ranging from energy to steel and telecoms, appeared at
the Central Bureau of Investigation (CBI) headquarters on Thursday, CBI
spokesman R.K. Gaur told Reuters.
Ruia was questioned
a day after billionaire Anil Ambani, chairman of Reliance Communications and
one of India's highest-profile businessmen, was questioned at CBI headquarters.
Investigators are
looking into a telecoms licencing scandal that may have cost India as much as
$39 billion in lost revenue.
Essar owns a
less-than 10 percent stake in Loop Telecom, a small carrier that was among the
companies asked to defend their licences after a state auditor said they were
not eligible for the licences they were awarded in 2008.
Unlisted Essar,
which is also Vodafone's partner in India's No. 3 mobile carrier, Vodafone
Essar, was not accused of wrongdoing in an auditor's report into the allocation
of 2G spectrum.
The 2G scandal, one
of several roiling India, has reached the highest levels of Indian business and
politics, and led to the sacking and arrest of the former telecoms minister and
the arrest of a telecoms company executive.
"Essar is in
full compliance with DoT (Department of Telecommunications) license norms and
all other applicable laws. As and when any information is sought Essar will
provide the same to the authorities," the Indian conglomerate said in a
statement.
Essar Group escapes 'scam' stigma
New Delhi:
In a
move that could be a breather to the Essar Group, the Corporate Affairs
Ministry has communicated to the Telecom Ministry that the Ruia-led group held
only 2.15 per cent stake in Loop Telecom at the time of obtaining 2G licence.
In a
letter, the Registrar of Companies (Mumbai) has pointed out that "the
Essar Group, directly or indirectly, held only 2.15 per cent of Loop Telecom
Pvt Ltd, as on 3.9.07, i.e. the date on which the application was made to DoT
for UAS licence".
When
contacted, a senior official in the ministry of corporate affairs (MCA)
confirmed the communication and said, "We have only provided the DoT with
what they had asked us. As on that particular date, Essar held that much (2.15
per cent) stake in Loop, as per documents available with us, and we have
forwarded the same to DoT."
The
RoC letter also said that "documents of the company do not substantiate
"Associate" relationship between "Essar Group and Khaitan
Group" as alleged.
ESSAR FIGHTS
VODAFONE'S 'CRIME' TAG
New Delhi:
Ruias-led Essar Group today launched a scathing attack on
Vodafone saying that the British company is trying to gain 100 per cent control
of the telecom JV Vodafone-Essar at an "artificially depressed
value".
A day after Vodafone complained to market regulator Sebi
to probe allegations of insider trading (scam) in India Securities Limited, a
listed company of Essar group, Ruias said the British company's allegations are
baseless.
Essar has proposed to merge Essar Telecommunications
Holdings Private Limited (ETHPL), which has 11 per cent stake in
Vodafone-Essar, with India Securities Limited in order to find out Fair Market
Value of its stake in the joint venture.
Vodafone-Essar is the third largest telecom operator in
India with over 124 million mobile subscribers. Vodafone had bought nearly 67
per cent stake from Hutchison in 2007 while Essar holds the remaining stake.
VODAFONE PAYS MORE TO
BAG ESSAR DEAL
MUMBAI/NEW DELHI: The troubled four-year-old joint venture partnership between British telecom giant Vodafone Group Plc and the Indian conglomerate Essar group ended amicably on Friday. Vodafone said it has struck a full and final settlement with its Indian partner, marking the exit of the billionaire brothers Shashi and Ravi Ruia from Vodafone Essar, the country's second largest telecom operator by revenue.
Vodafone said it has restructured the deal it had struck with Essar earlier
this year when it bought out its JV partner's 33% for $5 billion. The revised
deal now amounts to $5.46 billion factoring in the potential $880 million tax
liabilities. The transfer of shares from Essar to Vodafone for the 22% stake
was completed in two tranches on June 1 and July 1. The payment of $1.26
billion for the remaining 11% stake held by Essar's Indian entity will be made
by 15 February 2012. Vodafone has agreed to pay an additional $460 million to
the steel-to-shipping conglomerate Essar on the day it withdrew application
from Authority of Advanced Ruling (AAR) regarding withholding tax, as demanded
by the local tax authorities.
The estimated $880 million tax liability emanating from the deal will now be
shared by both the partners and deposited to the government authorities.
Vodafone will cough up $460 million, while Essar will pitch in with $420
million towards the tax burden. The net payout to Ruias stands at $4.58 billion
now. Shashi Ruia,
chairman, Essar Group, said, "We were one of the early entrants in the
telecom space in 1995 and we are really pleased that Vodafone
Essar has grown to become one of the premier telecom companies in
the country with over 140 million subscribers. We have also enjoyed an extremely
successful relationship with Vodafone and we wish them all success in the
future."
Essar said it would file tax refund application through its overseas arm in Mauritius.
The Indian conglomerate will gain additional $420 million if it wins the tax
review. Vodafone said in a statement that Essar has offloaded their entire
shareholding in the JV and relinquished all of their board seats. "Both
players also agreed to co-operate fully in seeking all regulatory approvals
necessary for the completion of the transaction," the statement added.
On March 31, Vodafone had announced it will acquire Essar's 33% stake in their
JV for $5 billion. While Essar's 22% stake in the JV was held in a Mauritius-based
entity, the remaining 11% was held in India. But this deal did not factor in
the possible tax liabilities, which was raised by the taxman shortly
thereafter.
TOI had reported in its May 18 edition that Vodafone feared it may have to
cough up an additional $1 billion on its latest purchase of Essar's 22%
overseas stake in its joint venture, in a statement during the announcement of
the company's financial results for 2010-11
Vodafone is already fighting a withholding tax liability case of $2.6 billion
on its $11.2 billion purchase of Hutchison Whampoa's 67% stake in 2007 which is
up for a hearing on July 19. Hutchison Essar became Vodafone Essar following
this transaction. A Vodafone spokesperson told TOI that Friday's decision to
withdraw the withholding tax application on the buyout of Essar stake will not
impact its legal contest against the previous claim raised by Indian
authorities, as the two cases "are factually and legally very
different".
Vodafone said the decision was intended to bring "a swift resolution" regarding the buyout of the minority shareholder the Ruias with whom Vodafone has had rocky ties. Experts argued that Vodafone has climbed down in its tussle with the tax authorities. In the current deal, Vodafone accepted to pay taxes in India on a deal involving entities registered outside the country.
Essar Communication, one of the vehicles which offloaded 22% stake in VEL, was
registered in Mauritius. Both Essar and Vodafone were arguing that no tax would
be payable on the deal even though Essar made substantial capital gains on its
investment. The government argued that the underlying asset of the seller was
the shares of Vodafone India and hence liable to pay tax on it.
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