The Tata Group companies have reportedly approached the Competition Commission of India (CCI) seeking approval to buy Docomo’s 21.6% stake in Tata Teleservices, following a nod from the Delhi High Court that allowed Tata Sons to pay NTT Docomo a $1.18 billion arbitration award upon termination of their telecom joint venture.
“Tata Sons, Tata Steel, Tata Industries, Tata Communications and Tata Power propose to undertake a transaction which will result in acquisition of equity shares of TTSL comprising 21.63 per cent of the paid-up equity share capital, by the acquirers from DoCoMo pursuant to certain consent terms entered into between Tata Sons and DoCoMo,” as per the agreement filed with CCI.
The group companies said that the buyout would not affect or change the competitive landscape of telecommunications market in India.
Tata Sons earlier said it would seek approvals of the CCI and tax authorities to remit $1.18 billion to estranged partner NTT DoCoMo to settle a long-standing dispute, according to various media reports.
Tata Group and DoCoMo have been locking horns over the alleged breach of contractual obligations pertaining to the Indian joint venture. The latest development could be seen aimed at ending the prolonged corporate battle. The issue began in April 2014 when Docomo decided to sell its entire 26.5% stake in Tata Teleservices and withdraw from the Indian telecom market. The Japanese company has been fighting Tata Sons over the right to sell its stake in Tata Docomo or Tata Teleservices for at least half the original value, as per the terms of the 2009 agreement.
Under the 2009 agreement, Docomo had the right to sell its stake at a fair market price or 50% of the acquired price. However, Tatas had said they couldn’t pay the Japanese company due to RBI rules, following its failure to find a buyer.
The Japanese company had begun arbitration proceedings in January 2015 against Tata Sons in the London Court of International Arbitration, which directed the Indian company to pay $1.17 billion as compensation for breaching the shareholder agreement.