FIPB defers decision on Vodafone Essar's proposal
The Foreign Investment Promotion Board (FIPB) has deferred decision on Vodafone Essar's proposal to hive off its tower businesses into a separate company, as the Department of Revenue has reportedly sought more time to examine it. The department will check whether the proposed investment through Mauritius-based companies would result in round tripping (routing of investments by an entity based in India through another country, tax havens like Mauritius, back to India).
According to the proposal, Vodafone Tower Holdings and Essar Infratel are planning to acquire 100 per cent stake in the recently incorporated Ortus Infratel. While both Vodafone Tower and Essar Infratel are incorporated in Mauritius, Ortus Infratel has been registered in Delhi. Ortus Infratel will then acquire 100 per cent stake in Vodafone Essar Infrastructure Limited.
Once the deal is completed, Ortus Infratel will own the towers currently under Vodafone Essar. It will also hold 42 per cent stake in Indus Towers.
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