The Madras High Court today reserved its order on whether UK-based telecom firm Vodafone has locus standi to oppose the merger of two subsidiaries of its Indian joint venture partner Essar.
Vodafone had filed a petition against Essar's proposal to merge Essar Telecommunications Holdings (ETHPL), which has 11% stake in Vodafone-Essar, with another Essar group's listed entity, India Securities, in order to find out fair market value of its stake in the joint venture.
When the matter came up before Justice Vinod K Sharma, senior counsel for Essar CV Sundram submitted that Vodafone had no locus standi to oppose the merger since it was not a shareholder of the subsidiary.
Meanwhile, the Income Tax department has sought a court order to Essar, directing it to make security payment of Rs 378.46 crore as the company (Essar's subsidiary) has arrears of around Rs 487.76 crore for the year 2008-09.
The court has, however, asked the I-T department as to under which law it is asking the company to submit security.
Further, after hearing the submissions, Justice Sharma said "before we go into merits of the case, let us first decide on the locus standi issue on whether Vodafone has any right to object the proposed scheme".
He reserved the order on the maintainability of the objection raised by Vodafone.