Govt open to dual listing of MTN, says is permissible

The government said today it is open to the dual listing of MTN, which is in an exclusive talks with Bharti for a merged entity of $23 billion, on the stock exchanges of India and South Africa as there is a provision to this effect. The South African government is learnt to have sought dual listing for MTN that would allow MTN shares to be traded on the Indian and South African bourses simultaneously with equal voting rights. "There is a provision for the dual listing of companies. The South African minister met me at G-20 finance ministers meeting and there I suggested to him that this arrangement is to be looked into in the Indian context," Finance Minister Pranab Mukherjee told reporters here. "There is no assurance as such, but I told him (the South African minister) that we will look into this matter and we will see what can be done," he said. Asked whether the dual listing can be done under existing laws, Mukherjee said that is being examined. According to sources, the South African government has asked India to enter into an agreement before the September 30 deadline that would allow dual listing of MTN. Bharti and MTN have been engaged in exclusive talks since May for a deal that will see the Indian company hold a 49 per cent stake in MTN, which in turn will hold a 36 per cent stake in India’s top mobile operator. The firms have extended talks twice. The deal will have to clear several regulatory hurdles and requires the shareholders' endorsement in South Africa and India. Rules in South Africa requires that 75 per cent of the shareholders must be present and voting to clear the merger. Several of MTN's shareholders have openly said they want Bharti to offer a higher price which would see the Indian company forking out more cash. Sebi has already exempted MTN from making an open offer if a merger deal materialises, provided it does not convert its GDRs into equity. The South African government has made it clear that the company has to retain its character as a African company. Tiyani Rikhotso, a spokesman for Communications Minister Siphiwe Nyanda, is quoted to have said “We obviously value MTN as a South African company; we want it to retain that character.” Public Investment Corp, the South African government pension fund administrator, owns 24 per cent of MTN and has raised several concerns about the tie-up.