The Competition Appellate Tribunal Thursday said fair trade regulator CCI's conditional clearance to Telenor's plan to increase stake in Telewings Communication to 74 percent was "premature".
New Delhi: The Competition Appellate Tribunal Thursday said fair trade regulator CCI's conditional clearance to Telenor's plan to increase stake in Telewings Communication to 74 percent was "premature".
Disposing the plea of Telewings Communication, COMPAT said that the tribunal was of the opinion that there was no need by Competition Commission of India (CCI) to go into the stage III and stage IV of the Telenor's plan as of now.
Telenor holds 49 percent stake in Telewings Communication Services while Lakshdeep Investment and Finance has the rest 51 percent at present. Telenor plans to increase its stake in the JV to 74 percent as part of four-stage roadmap.
In the stage-I, Telewings had to participate in the 2G spectrum auction and in the stage-II Lakshdeep would acquire 51 percent share in Telewings from Telenor South Asia and Telenor South East.
In the stage-III , Telewings would acquire the business of Uninor through intra-group transfer and in the final stage Telenor would increase its holding to 74 percent and Lakshdeep would be reduced to 26 percent following the conditional FIPB approval.
On November 29 last year, CCI had approved 51 percent stake sale in Telewings to Lakshdeep Investments and Finance.
However, CCI put brake on the stage IV, where "consolidated clearance" up to 74 percent was sought from the watchdog.
"The transfer of proposed business of Uninor to Telewings and proposed increase in stake of Telenor group in Telewings from 49 percent to 76 percent cannot be considered as intra group asset transfer and acquisition of share," CCI had said in its order.
This particular section was challenged by Telewings before the tribunal which disposed it by terming CCI's "observations are pre-mature" at this stage.
Telewings Communication Services had participated in the latest round of 2G spectrum auction in November and emerged successful bidder in six circles -- Andhara Pradesh, Bihar, Gujarat, Maharashtra, UP (East), UP (West).
COMPAT, headed by its Chairman Justice V S Sirpurkar said that "CCI has suo-motto power to enquire" and for stage-III and stage-IV when "it is to enquire into it, CCI would be free for that."