Essar today announced that its has sold its 22% stake in Vodafone Essar Limited to Vodafone. According to the press release, Essar Communications (Mauritius) Limited’s (“ECML”) wholly owned subsidiaries, Essar Communications Limited (“ECL”) and Essar Com Limited (“ECom”), have sold the 22% shareholding in Vodafone Essar Limited (“VEL”) to the Vodafone Group.
Under the agreements signed in Port Louis, Mauritius, Vodafone has made a net payment of US $3.32 billion, after deduction of withholding tax of US$0.88 billion. While Vodafone and ECML continue to believe that no tax is due on this transfer, it was viewed as prudent to deduct and pay withholding tax on a without prejudice basis and have ECL and ECom claim a refund of such withholding tax after following due process.
