Vodafone faces takeover opposition from telecom group

Vodafone, which has already locked horns with its new partner in a mobile phone joint venture in India, is now under fire from a lobby group taking legal action to halt the deal, a report from the Evening Standard said.

The mobile giant last month agreed to buy Hong Kong operator Hutchison's 67% stake in the company for $11 billion, the report said.

The Evening Standard report said India-based Telecom Watchdog, a non-government organization, has filed a petition with the High Court in New Delhi alleging a foreign shareholding in the company, Hutchison Essar, breaches Indian government regulations.

Essar has 33% of the equity in the firm and some 22% of that is held by an Essar company registered abroad. Telecom Watchdog argues that if Vodafone's proposed 67% is added to the 22% foreign component of the Essar stake, it breaches the government's 74% cap on foreign holdings in Indian telecoms companies, the report said.

A Hutchison spokeswoman said it complies fully with the rules. She said there were other Indian shareholders besides Essar, but declined to give a breakdown of its 67% interest in Hutchison Essar, the report said.

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