NTT DoCoMo has received over $1.2 billion (Rs 7,770 crore) in an award from Tata Sons, ending a three-year-old dispute between the Tatas and the Japanese firm over their telecom venture in India.
The award comes a year after Cyrus Mistry was ousted as Tata Group chairman. Tatas had accused Mistry of mishandling the dispute with DoCoMo and the issue was reportedly one of the flashpoints in the group feud.
“NTT DoCoMo has received from Tata Sons payment of the award amount in accordance with the High Court of Delhi’s decision regarding DoCoMo’s stake in Tata Teleservices Ltd,” DoCoMo said in a statement on its website.
Following the deal, DoCoMo has transferred its shares in Tata Teleservices to Tata Sons. The amount received by DoCoMo pertains to the arbitration award and includes interest earned and other costs awarded, it added. DoCoMo had announced the court’s decision in May this year.
Earlier in February, Tata Sons had said it had reached an agreement with the NTT DoCoMo “on a joint approach to enable enforcement” of a compensation award granted by the London Court of International Arbitration in 2016 in favour of the Japanese company. However, Reserve Bank of India had objected to the transfer which was later rejected by the Delhi High Court in April, thus clearing the decks for the Tatas to pay over $1.18 billion to the Japanese firm.
DoCoMo had in November 2009 acquired a 26.5% stake in Tata Teleservices for about Rs 12,740 crore, at Rs 117 per share.
As per an understanding reached between the companies in 2008, it was agreed that the Japanese firm would be paid a minimum 50% of the acquisition price if it exited the venture within five years.
Recently, Bharti Airtel announced the acquisition of Tata Group’s wireless/consumer mobile business in the hyper-competitive telecom sector.
BURYING HATCHET
- In April 2014, DoCoMo decided to part ways as the joint venture was struggling to grow
- It sought Rs 58 per share from Tatas but the Tata Group offered Rs 23.34 a share
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