Indian govt questions Bharti

By Nicola Mawson, Contributing journalist

Johannesburg, 09 Jun 2009

The Indian government has met with Bharti over its proposed deal with MTN, but has also indicated it will not interfere in the deal.

AsiaPulse reports this week that Bharti chief Sunil Mittal met Indian commerce minister Anand Sharma before the weekend to discuss the deal, which will see Bharti acquire a 49% stake in MTN.

The $23 billion deal will see MTN and its shareholders acquire an economic interest of about 36% in Bharti, of which 25% would be held by MTN, with the remainder held directly by MTN shareholders.

Although there was no information as to what was discussed, Mittal says no one has approached the company to raise its offer. SA's Public Investment Corporation said the deal was too cheap, although it was in favour of the merger.

Last week, Reuters reported India's government would not intervene in the deal, but would provide support if needed. Reuters cites the Economic Times newspaper, which quotes a senior federal minister.

“What do we have to do with other people's deals? ...We are not empowered for asking people what they are doing,” corporate affairs minister Salman Khurshid was quoted as saying. “But of course, if help is required in any aspect of corporate law or governance, we will come into the picture,” Khurshid told the financial daily in an interview.

However, the wire service previously reported the Indian government had asked Bharti to provide it with details of the proposed deal for legal scrutiny. “We have asked for formal request/papers about the deal from the company... There seems to be no problem with the deal but, still, we want to be sure (about the compliance),” Khurshid said.

“We will refer the Bharti-MTN deal to the law ministry to look at various aspects of the deal,” Khurshid noted.