Analjit Singh, Chairman of Max India Group, dispelled suggestions that he was not paid his due share when Britain’s Vodafone Plc increased its stake in the company’s Indian arm to 100%.
Singh said his stake was routed through various companies that in turn had debt obligations. As such, he explained in a statement, the amount that Vodafone would pay to buy those companies would not reflect the full value of those companies’ stake in Vodafone India, as Vodafone would have to discount the value of the debt that those companies had incurred in its valuation.
“The valuation of his stake in VIL will have to take this debt into consideration as well as the fact that the holdings are indirect unlike Piramal Enterprises Limited’s direct interest in VIL. The consideration payable to Mr Analjit Singh is consistent with the agreements signed between him and Vodafone, which were filed with the FIPB in 2007 and 2009,” a media statement, claiming to be on behalf of Singh, said.
The minority stakes held by Singh and former Hutch India CEO Asim Ghose had come into limelight a few years ago due to allegations that they were proxies for the majority shareholder. India did not allow foreign companies to own more than about three quarters of a local telecom company.
Subsequent to a change in telecom laws four months ago, Vodafone had said it was interested in buying out the minority shareholders. Government of India has approved the deal.