Icici Bank, Sify To Redo Joint Venture
ICICI Bank and Satyam Infoway (Sify) have dropped their earlier plans for their joint venture, icicisify.com. Instead, the two companies are planning to adopt an alternate structure for the venture, top sources involved in the negotiations said.
The two companies have formed their respective committees which are currently jointly discussing modalities for a new feasible structure. Icicisify.com, formed around six months ago, was initially set up for distributing the ICICI bank's retail products on the internet.
According to high level sources, the committees would be looking at a different structure which is yet to be finalised.
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"The need for a fresh look at the current structure has arisen as the whole scenario has changed since the joint venture was first conceptualised," a source said.
Srinivasan Gopalan, senior vice president at Satyam Infoway, would be heading the committee on behalf of Sify whereas, Mohan Shenoi, senior vice president and head of retail at ICICI Bank, would be his counterpart from the bank.
The two committees are also expected to decide on the structure of the board of directors and on the individual heading the joint venture.
David Appasamy, general manager corporate communications at Satyam Infoway, declined to comment on the issue. "A joint statement would be issued once a conclusion is reached," he added.
However, Kalpana Morparia, official spokesperson for ICICI, has denied that any structural changes are being made. "The groups are working on the modalities for the joint venture and no fresh changes are likely," she said.
This joint venture was announced way back in December 1999 and since then little progress has taken place.
Sify would be holding an equity stake of 50 per cent in the venture whereas ICICI Bank and ICICI Ltd would be holding 30 per cent and 20 per cent, respectively.
Initially this joint venture was expected to be between ICICI Bank and Sify only, on a fifty-fifty basis. However, RBI regulations on banks' equity participation in subsidiaries led to the decision of ICICI picking up a 20 per cent stake in the venture.