New Delhi : Tata Sons will seek the approval of the Competition Commission of India and tax authorities to remit $1.18 billion to estranged partner NTT DoCoMo to settle its long-standing dispute.
“As per the…order of the Delhi High Court, Tata Sons will take necessary permissions from the Competition Commission of India and tax authorities to remit the amount in lieu of shares to be transferred to Tata Sons as per the consent terms,” Tata Power said in a regulatory filing.
Last week, the Delhi High Court rejected the Reserve Bank of India’s objections in the Tata-DoCoMo case, clearing the decks for the Tatas to pay over $1.1 billion to the Japanese telecom major. Tata Group had been locked in a legal battle with DoCoMo over the alleged breach of contractual obligations pertaining to the Indian joint venture – Tata Teleservices (TTSL). “In terms of the…agreement dated March 25, 2009, Tata Power is to acquire 118,222,767 (11.82 crore) equity shares of TTSL.
As on the date of the Arbitration Award that is June 22,2016, USD 117,128,573 (117.1 million) was payable by Tata Power for the same,” Tata Power saidin the BSE filing. The final amount that is payable would be determined onthe date of the payment to Docomo and would, therefore, “vary” over the amount indicated, it clarified. Tata Power has remitted Rs 790 crore to Tata Sons onAugust 09, 2016 and this “will be appropriately adjusted” against the amount governed by the stipulated terms and conditions.
It may be recalled that the two sides had gone for arbitration as the Indian company was not able to find a buyer for the Japanese telecom major’s 26.5 per cent stake in their joint venture, when it exited from it.
As per the shareholding agreement, on DoCoMo’s exit from the venture within five years, Tata was to find a buyer who would purchase the Japanese company’s stake at minimum 50 per cent of the acquisition price, which came to around Rs 58.45 per share.The other option was Tata purchasing the shares at the fair market value, which was Rs 23.44.