Tuhin Kanta Pandey clarifies govt action re Vi

The government has said that the conversion of Vodafone Idea dues into equity was done at Rs 10 per share as it would have been illegal to do it below par. The government has also clarified that it will not have any management control and will treat it as an investment.

Addressing a post-Budget conference in Mumbai, department of investment and public asset management (Dipam) secretary Tuhin Kanta Pandey said that his department would hold the shares. This would be similar to the government’s holding in ITC and others, which was acquired due to the UTI bailout.

“We will not have any board seat or management control and will be classified as public shareholders for which we have received Sebi exemption. This was part of a rescue package. In the past, there ha-ve been rehabilitation proposals where the practice was to convert bank dues to equity, and here the dues were not to banks but to the government,” said Pandey.

Pandey said the law requires that any loan conversion to equity be on par and that the government cannot violate the law. Last week, Vodafone Idea announced that it had accepted a government scheme to convert Rs 16,000 crore of interest into equity, which would result in the government acquiring a 33% stake. ToI