The Bombay high court on Thursday reserved its order on a petition filed by Hutchison Essar seeking to restrain its joint venture partner Essar from selling stake in BPL Mobile Communications Ltd. The court of Justice Nishita Mathre will hear the case next week.
The BMCL counsel has alleged that Hutchison Essar was trying to kill the company through uncompetitive methods like luring its senior employees with job offers even before the deadline of the merger expired.
Hutchison lawyers said the company would like to get BMCL and are ready to face the consequences, including termination of licence, if DoT approval does not come through.
Hutchison Essar sought permission to move the case to an Arbitration Tribunal and an interim protection order that restrains Essar from selling BPL stake to a third party, until the court proceedings were over.
BMCL's counsel said his client would not sell any stake till the court proceedings were on. However, both the counsels had agreed to maintain status quo till the court proceedings were over.
BPL Communications holds 74 per cent stake in BPL Mobile, which has operations in the Mumbai Circle, while Essar Teleholdings has 9.9 per cent and the remaining is held by Capital Ventures.
The petition was filed by Hutchison Essar against BMCL, stating that it had paid Rs 1,617 crore (Rs 16.17 billion) for the 97.5 per cent stake and was ready to pay the remaining Rs 33 crore (Rs 330 million) for the balance 2.5 per cent stake. The total consideration of the deal was Rs 1,650 crore (Rs 16.50 billion).
Essar holds one-third stake in Hutchison Essar and had terminated the deal after the extended deadline expired on July 31. BMCL had also offered to return the money within five business days.
On termination of the deal, Essar has the right to sell off the company either in entirety or partly to a third party, for which Hutchison Essar had sought an injunction. The petitioner (Hutchison Essar) wanted the respondent (BMCL) to sell the stake to the former, which was refused by BMCL citing regulatory issues.
The counsel of Hutchison Essar also informed the court that the Department of Telecom's approval would be obtained once the deal is completed, but BMCL counsel informed the court that regulatory approvals were required prior to the signing of the deal.
Essar Teleholdings had acquired BPL Mobile, Mumbai, and three other circles for $1.15 billion last year from BPL's Rajeev Chandrasekhar and had subsequently merged all circles, except the Mumbai circle.
This was stated by the counsels of Hutch and Essar, who have been at loggerheads over the merger of BPL Mobile's Mumbai circle with their telecom joint venture, at the Bombay High Court.
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