FIPB clears Koshika Telecom8217;s FCD issue

NEW DELHI, June 14: Foreign Investment Promotion Board FIPB today allowed Koshika Telecom Pvt Ltd to issue fully convertible debentures...

NEW DELHI, June 14: Foreign Investment Promotion Board FIPB today allowed Koshika Telecom Pvt Ltd to issue fully convertible debentures worth Rs 120 crore to replace its foreign partner Philippines Telecom Corporation PHILTEL.

The debentures would be picked up by French telecom major Alactel, New World Telecom and an NRI non-resident Indian consortium. Philtel, which has 34 per cent stake in Koshika, would hold only a token shareholding after the conversion of the debentures, FIPB sources said.

Koshika Telecom is among 25 foreign direct investment FDI proposals worth Rs 210 crore cleared by FIPB today, including amendments in existing ventures of Honda Siel cars, AES Transpower and Compaq.

The board also cleared the proposal of Swedish match to wrest control of Wimco Ltd by bringing in Rs 31.3 crore. With the infusion of fresh foreign equity, the stake of the Swedish company in safety matches company would go up from existing 38.61 per cent to 52 per cent, the sources said.

The fresh infusion is part of a package to turnaround Wimco, which is at present under Board for Industrial and Financial Reconstruction BIFR. The Jatias hold the remaining stake in the company.

Meanwhile, former communication minister Jagmohan is believed to have ignored Department of Telecom8217;s DoT legal adviser8217;s opinion on referring the case of Koshika Telecom to the law ministry for extending the effective date on licence agreement since such a treatment was being given to other companies.

Prior to his shift from telecom to urban affairs ministry Jagmohan had denied extention of effective date in licence agreement to the Koshika Telecom and ordered cutting of interconnection of company8217;s network with the national network in three circles for its cell operations.

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Ministry sources said that Jogmohan did not accept the department8217;s legal adviser8217;s opinion and instead took the action to disconnect the network on May 22.

DoT8217;s legal adviser P K Malhotra had written on May 4 that quot;in case M/s Koshika Telecom Ltd also stands on the same footing as the other companies to whom change in effective date has been allowed in the past, legally it may be difficult to deny parity to this company with other companies.quot;