‘Essar has no right of refusal’

The Essar Group does not have a right of first refusal over Vodafone Group Plc’s $11.1 billion deal to buy a controlling stake in Hutchison Essar...

The Essar Group does not have a right of first refusal over Vodafone Group Plc’s $11.1 billion deal to buy a controlling stake in Hutchison Essar, the chief executive of Vodafone said on Wednesday.

Essar, an Indian conglomerate that owns a third of the Indian mobile operator, has for long claimed rights of first refusal in any stake sale in Hutchison Essar, raising fears it could resort to litigation to thwart or delay the deal.

Arun Sarin also said in New Delhi that Vodafone would retain Hutchison Essar chief executive Asim Ghosh after it takes control of India’s fourth-largest mobile operator.

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“With respect of Vodafone, Essar does not have right of first refusal,” Sarin, who was in India to ensure a smooth start to finalising the deal, told journalists.

Essar declined to respond when asked for a comment. The nature of the right of first refusal in the agreement between Hutchison Telecom International Ltd and the Essar Group has been disputed by the parties.

Hutchison has said the right would only apply if it sold its stake to certain Indian companies, who a source told Reuters were three rivals of Hutchison Essar, while Essar Group has said it saw a broader right of refusal.