Govt rejects Etisalat's proposal to transfer shares

The government is believed to have rejected a proposal of UAE-based Emirates Telecommunications Corporation (Etisalat) to increase stake in its Indian venture.

The company had applied for transfer of shares from resident to non-resident of a company engaged in the telecom sector. Etisalat officials could not contacted for comments.

Foreign Investment Promotion Board (FIPB), the nodal government body for decisions on foreign investments has deferred the proposal of Etisalat to increase its stake in Etisalat DB, formerly known as Swan Telecom, without giving any reason.

Earlier, also the proposal was deferred as the Ministry of Home Affairs raised various security concerns.

The Gulf telco currently holds about 45 per cent stake in the mobile operator, having paid $900 million for the holding in September 2008.

The other major shareholders in Etisalat DB are real estate firm DBG Group, which has a 45.73 per cent stake in the company.

Etisalat DB and its subsidiary has the Unified Services Access License in 15 circles including Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu (including Chennai), Uttar Pradesh (East), Uttar Pradesh (West), Madhya Pradesh and Bihar.

Earlier, their were reports that Etisalat is looking at a deal with Reliance Communications as it mulls its options in India. Etisalat, was also exploring options in India and was interested in acquiring a stake in Idea Cellular.