Tata Tele plummets 6% as RBI opposes DoCoMo settlement in HC

Moneycontrol NewsTata Teleservices plunged 6 percent intraday Thursday after the Reserve Bank of India (RBI) opposed its settlement deal with DoCoMo in the Delhi High Court. The central bank opposed the consent terms filed by Tata Sons and NTT DoCoMo in their long-standing dispute. Last month, Tata Sons agreed to pay USD 1.17 billion in damages to Japan's DoCoMo, following which, both the sides decided to approach the Delhi High Court to accept their settlement. The RBI opined that the put clause agreement in the settlement is illegal and may lead to extra short-term gains for the Japanese partner. The Delhi High Court slammed the central bank for opposing the consent terms. It has asked RBI to clarify whether it has the powers to oppose an arbitral award. In 2009, the Japanese telecom giant invested around USD 2.6 billion in order to buy a 26.5 percent stake in Tata Teleservices (TTSL). Under the terms of that deal, in the event of an exit, DoCoMo was guaranteed the higher of either half its original investment, or its fair value. DoCoMo later deemed the venture as its “worst” overseas investment, and sought USD 1.17 billion in compensation for its 2014 exit from India. In June last year, an arbitration court in London ruled against the Tata Group. Docomo had alleged a breach of contract on the grounds that Tata Sons had neither found a buyer nor bought back the Japanese partner's 26 percent stake in their telecom joint venture Tata Teleservices.The stock has fallen over 15 percent in the past one week, while its 3-day loss stood at 11.53 percent. At 09:26 hrs, it was quoting at Rs 8.13, down Rs 0.51, or 5.90 percent. It touched an intraday high of Rs 8.34 and an intraday low of Rs 8.08.