Soft options

London, Feb. 13: Vodafone today took a conciliatory approach towards the Essar group following a report that the Ruia brothers, Sashi and Ravi, who hold a minority 33 per cent stake in Hutchison Essar, are contemplating possible legal action against the UK telecom giant.

The Vodafone management said it is not aware of any legal action that the Ruias have in mind.

A spokesman told The Telegraph that Vodafone paid due credit to Essar for the growth of Hutchison Essar and saw the company as its right partner for the future.

“The situation is very clear,” said the spokesman. “We have made an offer to Essar. The offer is very clear. We see the Essar group as the right partner for us. We would like them to remain with us as partners.”

As for possible legal action, the spokesman was not forthcoming. “That’s a matter for the Essar group. We would not like to speculate on speculation.” As to why Vodafone was keen to have Essar as a partner following its acquisition of a controlling 67 per cent stake in Hutchison Essar for a cash consideration of $11.1 billion, the spokesman explained: “Essar has been involved from an early stage, has good knowledge of it and of the market place as well. We see them as ideal partners.”

The alternative is Vodafone purchasing Essar’s 33 per cent stake.

Vodafone does not appear to be unduly put out by a report today in The Times that Essar could “disrupt” the deal.

According to The Times, the Ruia brothers “are understood to have significant concerns about moves by Vodafone to forge ahead with plans such as network sharing, without consulting it first”.

The paper said: “The plan to share network with Bharti Airtel, India’s top-ranked mobile player, is central to Vodafone’s strategy to maximise returns from Hutchison Essar. The Ruia brothers, who have long claimed legal rights, including a right of refusal over Vodafone’s bid, are understood to be considering taking legal action.”

The Times added: “Sources close to the brothers, who are yet to decide whether to sell out of the venture or accept Vodafone’s offer of a partnership, say they are unhappy that Vodafone is treating its acquisition as a done deal when their position is yet to be resolved.”