The Chennai-based Reddy family of the Apollo Hospitals group paid $7.6 million for 0.7% of the $1.08 billion Aircel sale deal, but managed to get 26% equity in the company.
The other 74% stakeholder in the company, the Malaysia-based T Ananda Krishnan-owned Maxis Communications, eventually got hold of a 99.33% economic interest in Aircel.Although foreign direct investment norms do not allow a foreign entity to hold more than 74% in an Indian company, its view on economic interests is still not clarified.
The deal is being scrutinised by investigating agencies that are probing the allotment of 2G spectrum since 2001.
“I am travelling and would request that you wait till Monday,” said Suneeta Reddy, Aircel chairperson and executive director (finance) of Apollo Hospitals, after repeated emails and SMS messages sent to her between Monday and Wednesday. “I am overseas and will mail you as soon as I return,” she said later. Krishnan, who has a net worth of $7.6 billion and was ranked the world’s 89th wealthiest person in 2010, didn’t respond to repeated emails.
According to a circular issued to shareholders by Maxis Communications in February 2006, it all began with Maxis subsidiary, Global Communications Services Holdings Ltd, buying 26% equity in Aircel for $280 million by subscribing to a fresh issue of shares. The balance was bought for $800 million in two steps. First, Global acquired 39% directly in Aircel for $422 million. Next, Global and the Reddys formed a joint venture, Deccan Digital Networks Pvt Ltd, to acquire the rest 35% for $378.8 million in Aircel.
Now, the Reddys invested $7.6 million to own 74.29% in Deccan Digital while the balance 25.71% is with Global Communications. So, 74.29% of the 35% Aircel stake made the Reddys owners of 26% of the company.
Similarly, with its already acquired 65% in Aircel and a holding of 25.71% in the joint venture's 35% stake, Maxis' holding in Aircel came to 74%.
Later on March 21, 2006, Maxis stated in an announcement on the Bursa Malaysia Stock Exchange that Global had invested $368.6 million in a cumulative redeemable non-convertible preferential share issue by Deccan Digital.
This fresh investment, according to a Maxis report on the quareter ended March 31, 2006, took the company's interest in Aircel to 99.3% .