The deal is between two private companies. But the action is between two governments a continent apart. Not surprisingly, Bharti’s complex merger-like deal with South Africa’s MTN is yet to see the finish mark.
South Africa’s treasury and banking officials will be meeting Finance Ministry officials from Tuesday to discuss various legal and regulatory issues regarding the proposed deal.
The South African government, with an eye on national pride and maintaining MTN’s identity, wants that India should permit dual listing of the merged entity in case the proposed deal bears fruition. Indian laws do not permit dual listing and would likely involve a capital account convertibility of the rupee, which involves serious regulatory issues.
"We have received an application from MTN for an exemption on a range of exchange-controls regulations, and due process is being followed…It would be important that such mergers are not only of benefit to the two companies, but to both countries as well", Thoraya Pandy, spokerperson National Treasury, South African Government, was quoted by PTI as saying.
The finance ministers of India (Pranab Mukherjee) and South Africa (Pravin Gordhan) recently discussed dual listing of Bharti-MTN. Prime Minister Manmohan Singh and South African president Jacob Zuma are also expected to meet on the sidelines of the G20 summit in Pittsburgh, USA, this week to discuss dual listing.