New Delhi, Oct 29 : British telecom company Vodafone Plc Tuesday sought the Foreign Investment Promotion Board's approval to raise its stake in its Indian arm - which is involved in a Rs.20,000 crore tax dispute - from 64.38 to 100 percent by investing Rs.10,141 crore.
"Vodafone confirms it has filed an application with the Foreign Investment Promotion Board to increase its holding in Vodafone India Ltd from 64.38 percent to 100 percent," the company said in a statement.
In August, India relaxed foreign direct investment rules in telecom sector, allowing companies like Vodafone to own 100 percent of their Indian businesses.
Â“The total inflow of foreign investment into India as a result of the proposed transactions will be approximately Rs.10,141 crore. Following the completion of these transactions, Vodafone will also consider providing additional funding to VIL by subscribing to equity shares of VIL,Â” the statement added.
Vodafone entered India in 2007 by buying out Hong Kong-based Hutchison in Hutchison Essar for $11 billion. The tax dispute relates to this transaction.
Finance minister P. Chidambaram in June had offered to enter into non-binding conciliation with the company to resolve the tax dispute under Indian laws. But Vodafone has favoured conciliation under United Nations Commission on International Trade Law.
The remaining stakes of the company are with industrialist Ajay Piramal, who has 11 percent, while the remaining 25 percent is with minority shareholders.
Â“We have always said we would like to increase our holding in the business and this further investment demonstrates VodafoneÂ’s long-term commitment to India,Â” the telecom major said.
Â“Looking ahead, Vodafone will continue to invest in India to bring the benefits of mobile communications and financial inclusion to more and more people across the country,Â” it added.