Vodafone Idea seeks clarity on whether it can receive investments from Hong Kong under automatic route

At the same time as Vodafone Concept is trying to usher in contemporary funds from new traders it has sought readability on whether or not investments from Hong Kong would require prior authorities approval. Whereas the federal government has allowed 100 per cent of international direct investments within the telecom sector to occur by the automated route, international locations that share a land border with India are required to get their investments authorised by the federal government first.

Vodafone Concept, in a submission to the Telecom Regulatory Authority of India, has sought an specific listing of nations that might be thought-about as sharing a land border with India,  “For instance, it isn’t clear whether or not Hong Kong is taken into account as a land border nation for the needs of the above provision.” Voda Concept mentioned.

As per the telecom licence, an entity of a rustic, which shares land border with India or the place the useful proprietor of an funding into India is located in or is a citizen of any such nation, can make investments solely beneath the Authorities route

Vi has sought clarification whether or not the time period ‘entity of a rustic’ is set on the idea of the situation of the workplace or the possession of the funding or each.

Telecom licence guidelines stipulate that Within the occasion of the switch of possession of any present or future FDI in an entity in India, instantly or not directly, ensuing within the useful possession falling throughout the nation particular restriction then such subsequent change in useful possession will even require Authorities approval.

Vodafone Concept has asought readability on the definition of ‘useful possession’ beneath telecom licence. Whereas The Firms Act, 2013, prescribes a threshold of 10 per cent possession for figuring out useful holding, the Prevention of Cash Laundering Act, 2002 (PMLA), prescribes a threshold of 25 per cent  possession. “Nevertheless, no such threshold has been talked about within the licence. Due to this fact, it could be fascinating if this facet can be clarified,” the operator mentioned. 

Vodafone Concept board lately authorised a ₹14,500 crore fundraising plan. Out of this ₹4,500 crore is slated to return from promoters of Vodafone Group and Aditya Birla Group through preferential fairness allotment. The remaining ₹10,000 crore will come by a combination of debt and fairness, for which Vi must proceed its fundraising endeavours from overseas.

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March 18, 2022