» Business » Aitraaz as always for MTN in India; from '04 till now

Aitraaz as always for MTN in India; from '04 till now

Source: PTI
July 21, 2008 15:06 IST
Get Rediff News in your Inbox:

The word 'aitraaz' seems to have stuck with South African telecom major MTN in India -- from its first mention four years ago in a Bollywood blockbuster in 2004 to the two instances this year regarding its encounters with two corporate houses -- Mittals and Ambanis.

MTN possibly first found its mention in India in a super-hit Hindi movie named Aitraaz, meaning objection, which had stars like Akshay Kumar, Priyanka Chopra and Kareena Kapoor.

The movie, incidentally a court-room drama, had its lead actors asserting their Aitraaz to each other over issues like relationships, illicit affairs and other allegations and had the main protagonist, played by Akshay, as an employee of the South African mobile firm MTN when he meets the antagonist, whose role was essayed by Priyanka.

When the movie hit the theaters in 2004 it became an instant hit, but not much attention might had been on MTN at that time and hardly had any one visualised that the name of this company would grab the headlines across the media four years later in 2008.

This time around, MTN got its mention in India not because of a movie, but for an entirely business proposition -- it entered into negotiations earlier this year for a potential business amalgamation deal with the country's top private sector telecom player Bharti Airtel -- run by billionaire businessman Sunil Mittal.

After days of talks over the deal table, Bharti expressed its aitraaz on May 24 to certain deal structures proposed by MTN and disengaged itself from the talks.

Bharti said that after 'an in-principle agreement' was reached for a possible transaction, MTN presented 'a completely different structure' from what was agreed.

The Indian firm alleged MTN of proposing a deal that would have made it an arm of the South African firm and due to this 'Bharti's vision of transforming itself from a home grown Indian company to a true Indian multinational telecom giant, symbolising the pride of India, would have been severely compromised and this was completely unacceptable to Bharti.'

Soon after Bharti's aitraaz on May 24, MTN on May 26 announced joining on the deal table with another Indian telecom giant, Reliance Communications, run by another Indian billionaire Anil Ambani.

While the talks were considered to be going smoothly with RCOM for some days, it witnessed another 'Aitraaz' surfacing on June 12 this time from RIL, India's most valued corporate entity, run by Anil's estranged elder brother Mukesh Ambani.

RIL's objection, which is believed to have been the key reason in the collapse of the exclusive negotiations between RCom and MTN late last week, was to a deal structure that envisaged RCom selling a majority stake to MTN.

While RCom vigorously defended RIL's claims, the Mukesh Ambani group firm went ahead with asking the Anil Ambani group firm to engage in mutual conciliation process, failing which it threatened to start the arbitration process to resolve the dispute.

RCom refused to engage in any conciliatory talks and rather offered a clarificatory meeting, which in turn was rebuffed by RIL. Thereafter, RIL announced on July 17 the start of arbitration process by nominating former Supreme Court Judge B P Jeevan Reddy as an arbitrator.

Two days after the start of arbitration proceedings, MTN and RCom announced the collapse of their talks -- a development that many saw RIL's aitraaz proving to be the final nail in MTN's current plans for an Indian deal, although speculations are still rife that MTN might return to explore possibilities of a deal with Bharti, notwithstanding the earlier aitraaz.

Get Rediff News in your Inbox:
Source: PTI© Copyright 2021 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.

Moneywiz Live!