The Reserve Bank of India has rejected a proposal made by Tata Sons', the holding company of all Tata group firms, to buy NTT DoCoMo's stake in joint venture Tata Teleservices Ltd (TTSL) for about Rs 7,250 crore.
In April last year, NTT DoCoMo, Japan’s biggest telecom operator by subscribers, said it will sell its entire 26.5 per cent stake in TTSL, thus exiting India five years after it entered the market. The plans to exit came after the Indian company failed to achieve certain performance targets specified in the agreement between the two companies.
“The RBI has conveyed that it cannot accede to this request as the same is not in conformity with the extant Foreign Exchange Management Act regulations and has advised that any such purchase of shares be at current fair value of shares. This issue will now have to be resolved in the arbitration between the parties,” when contacted, a Tata Sons spokesperson, said.
“Steps towards initiating arbitration have been taken,” he added.
Tata Sons had in November last year applied to the RBI to purchase NTT DoCoMo's stake at Rs 58.045 per share.
The Japanese company had acquired the stake in March 2009 for $2.7 billion (Rs 13,070 crore at the then exchange rate).