Vodafone objects Essar8217;s reverse listing of telecom holding co

"Vodafone has written to both BSE and Sebi to express its concerns," the firm said.

Vodafone has complained to market regulator Sebi and the Bombay Stock Exchange about its partner Essar8217;s plans to transfer 11 per cent stake to another listed group firm saying it was not disclosed by the Indian partner.

8220;Vodafone has written to both BSE and Sebi to express its concerns regarding reverse listing of Essar Telecommunications Holdings Private Ltd which owns an indirect 11 per cent in Vodafone-Essar into India Securities Ltd and has asked for the matter to be examined,8221; Vodafone said in a statement.

Vodafone-Essar is the third largest mobile operator in India. Vodafone had aquired nearly 67 per cent stake in 2007 while Ruias-led Essar have little over 33 per cent equity in the joint venture.

India Securities Ltd ISL is a group firm of Essar and is listed on the bourses. Transfer of 11 per cent stake held by Essar Telecommunications Holdings to ISL would allow shareholders of ISL to participate in Vodafone-Essar.

Essar is doing so to get to know the fair market value of its 33.02 per cent stake,for which the company has the right to exercise the Put Option,a contract that gives the seller the right to sell a specified quantity of securities at an agreed price within a specified time period.

According to the foreign partner,8221;There has been no disclosure to the shareholders of ISL on Vodafone Essar,which would become a substantial asset of ISL. Therefore,the investors in ISL have no basis on which to form a valuation judgement.8221;

It Vodafone also said that Essar Telecommunications8217;s wholly-owned subsidiary has stated in its Information Memorandum of September 2009 and January 2010 that it would use the proceeds from the bonds secured against Essar8217;s Put Option to invest internationally in sector like coal,steel and refining.