Tata Sons Ordered To Pay $1.17 Billion To Japan's NTT DoCoMo

Tokyo: Tata Sons has been ordered to pay Japan's largest mobile phone firm NTT DoCoMo $1.17 billion in compensation for breaching an agreement on India joint venture. The London Court of International Arbitration ruled in favour of DoCoMo over price it was entitled for exiting the Indian joint venture, the Japanese firm said in a statement. In November 2009, Docomo had acquired 26.5 per cent stake in Tata Teleservices for about Rs 12,740 crore (at Rs 117 per share). Later, in April 2014, the company decided to exit after the joint venture struggled to grow subscribers quickly. DoCoMo said its 2008 investment was with an understanding that it would get at least 50 per cent of its acquisition price if it exits the Indian company in five years. Accordingly, it sought Rs 58 per share or Rs 7,200 crore from Tatas to buy out Japanese telecom major's 26.5 per cent stake in the loss-making Tata Teleservices for Rs 23.34 a share. The Japanese firm had filed for arbitration on January 5, 2015. The company said "it received on June 23, 2016, from the London Court of International Arbitration a binding arbitration award under the arbitration proceeding regarding its stake in Tata Teleservices (TTSL), a telecommunication service provider in India." "The award orders that Tata Sons pay damages to DoCoMo in the amount of approximately $1.172 billion for Tata Sons' breach of the shareholders agreement, upon DoCoMo's tender of its entire stake in TTSL to Tata Sons or its designee," it said in a statement. According to the arbitration award, Tata Sons will receive or designate a recipient for DoCoMo's entire stake in TTSL. DoCoMo said it is uncertain whether Tata Sons will pay the awarded damages. "As of the date of this press release, some matters remain uncertain, including whether Tata Sons will pay the awarded damages and when the delivery of TTSL's shares will be made. Accordingly, DoCoMo is not able to predict how events will unfold," it added. Tatas offer to DoCoMo was in line with the Reserve Bank of India guidelines that state that an international firm can only exit its investment at a valuation "not exceeding that arrived at on the basis of return on equity." It had made an offer of Rs 23.34 a share after the finance ministry and the RBI rejected the Group's application to buy back DoCoMo's shares at the pre-agreed valuation of Rs 58 a share. The 60 per cent lower offer was made on the basis of a fair market value determined on June 30, 2014. TTSL witnessed its complete networth erode two years ago and it posted a loss of Rs 3,846 crore on a revenue of Rs 10,944 crore in 2014-15 fiscal. .(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Tata Sons Ordered To Pay $1.17 Billion To Japan's NTT DoCoMo

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