Saturday, 13 August 2016

AIRECEL TRICKS

Maxis Communications: Aircel stake purchase proper

PETALING JAYA: Maxis Communi-cations Bhd (MCB) (the major shareholder of Maxis Bhd) says it was in full compliance with the applicable laws of India when it bought a stake in India's Aircel in 2007 and denies allegations that have surfaced in a recent news report in India.

MCB and tycoon T. Ananda Krishnan have come under the spotlight recently after a report in India's Economic Times alleged that the country's Central Bureau of Investigations was likely to name Textiles Minister Dayanidhi Maran and MCB in a First Information Report (FIR) relating to investigations surrounding the 2007 ownership change in Aircel, the Chennai-based cellular company. (An FIR is a written document prepared by the police in India when they receive information about the commission of an offence.)

MCB in a statement said in response to the report that “at the outset, MCB denies each and every allegation of impropriety as set out in the editorial of the Economic Times.''

Separately, Maran had on May 24 filed a civil suit in the Madras High Court against the newspaper for publishing articles that he alleged were defamatory.

Citing CBI officials, the report said the FIR was likely to be filed before July 6, when the Supreme Court reopens after the summer break. It will be a follow-up to a preliminary enquiry that was supposed to examine decisions taken by the telecom ministry in the six years to 2007.

The takeover of Aircel by MCB dates back to 2006. Aircel was owned at that time by C. Sivasankaran, an entrepreneur.

The report alleges that Maran was the then telecoms minister who had failed to clear the application made by Aircel for licence and spectrum with a view to pressurise Sivasankaran to strike a deal with Maxis.

MCB said its investment in Aircel was in full compliance with the applicable laws of India and had the approval of the requisite authorities. It said at the time of the acquisition and through to July 2007, MCB was a public company listed on the Malaysian Stock Exchange and the details of the investment in Aircel was fully disclosed to the stock exchange and MCB' shareholders.

MCB claims the acquisition of Aircel from Sivasankaran's vehicle, Siva Ventures Ltd (SVL) was made after a negotiated process in which both parties had extensive professional advice. “It was a competitive process involving other bidders which SVL could have sold to. It said it succeeded because it offered the best terms.

“To MCB's knowledge, there was no pressure exerted on SVL to sell its stake in Aircel. In fact, SVL was a willing seller, determined, naturally, to obtain the best terms, Ultimately. SVL chose to accept the terms offered by MCB,” the statement said.

MCB added that, together with its Indian partner, Sindya Securities & Investments Pvt Ltd (owned by Me Dwaraknath Reddy and Mrs, Suneeta Reddy), concluded the acquisition of Aircel on March 21, 2006.

Ananda's private vehicle, Usaha Tegas group has a 45% stake in MCB, while Saudi Telecom and bumiputra shareholders own the remaining 25% and 30% respectively in MCB.

MCB has 70% equity stake in Maxis Bhd, which is listed on Bursa Malaysia. MCB claims that Maxis Bhd has no involvement whatsoever with its investment in Aircel. MCB's foreign telecoms assets such as Aircel were not included when Maxis Bhd was refloated on Bursa Malaysia in November 2009

MCB also clarified there were no linkages between MCB's investment in Aircel with Astro's investment in Sun Direct TV.

This is not the first time the issue has been raised as in February the three parties had denied any linkages when reports emerged.

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Himanshu Shrivastava
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