TCIL may approach company law board against Bharti Airtel

State-owned telecom engineering and consultant firm Telecommunications Consultants of India (TCIL) has accused Bharti Airtel of suppressing demands of its representatives on the board of their joint venture Bharti Hexacom and is considering to approach company law board against the same.

"We have discussed it in a board meet and are seeking legal opinion on it. This issue will be discussed again in upcoming board meeting before taking any final decision," a source close to the development said.

TCIL has 30% equity in Bharti Hexacom Ltd (BHL), while telecom giant Bharti Airtel Ltd (BAL) owns the remaining 70% stake. The JV operates in Rajasthan circle mainly and offers mobile telecom services.

Asserting that its representatives have no say in the management, TCIL said BAL nominees are also refusing to declare dividend in Bharti Hexacom despite constant demand from the former.

The official alleged that BAL has been debiting large sums on account of management fees to Bharti Hexacom.

When contacted, Bharti spokesperson said, "the company does not comment on market speculations."

TCIL has been objecting to it (management fee) but BAL having majority in the Board of Directors is not agreeable to withdraw it, an internal communication of the DoT said, adding the view of TCIL is not being accepted.

It added that the members have proposed to increase the management fee substantially in the last board meeting.

The company was incorporated in 1995 and was promoted by TCIL, Shyam Telecom Limited (STL) group and others. The shareholding has changed over a period of time and in 2004, Bharti Airtel acquired 68.5% stake in it.

Bharti Airtel acquired a further 1.5% equity from MTC, taking its shareholding to 70%.

The government has been looking at selling its stake held through TCIL in Bharti Hexacom. "BAL has put in a number of conditions in the confidentiality agreement like NDA will be for a period of three years. It being restrictive clause, investors are not attracted to a minority stake of TCIL in BHL," the sources said.

THe sale of TCIL's 30% stake has been on hold for quite some time now which could have fetched the government a handsome revenues through disinvestment process.