MTN Group must remain a South African entity managed by locals, Communications Minister Siphiwe Nyanda told media today in Johannesburg.
“We would love to see MTN remain a South African company, its management must remain South African, he said.
The minister also dismissed fears that the government might cause delays in the deal.
“We are waiting for results of the discussions between MTN and Bharti. Any possible delays with the deal would not be because of the South African government,” Nyanda said
Media report from Indian today said the deal was now in the hands of South African government as they have to come up with an offer that comply with Indian laws.
The Economic Times said the Indian finance ministry is likely to accommodate the deal if it is not in direct violation of India’s policy on dual-listed companies, which in its current avatar may need changes in the capital account convertibility regime.
Under the proposed scheme of arrangement announced in May, MTN will hold a 36% stake in Bharti Airtel through Global Depository Receipts to be listed in Johannesburg.
The South African government has also sought dual listing of the companies which is not favoured by RBI, as it would require the full convertibility of rupee. Under dual listing, where the shares are listed on different exchanges (Indian/Johannesburg) it allows investors an option where they want to trade besides it provides liquidity.
South Africa wants Bharti to be allowed dual listing in Johannesburg so that its shares, and not depository receipts, can be traded in South Africa. The problem here is that dual listing is linked to the full convertibility of the rupee which is not allowed in India. The Indian rupee is partially convertible with entities free to exchange it to pay for trade in goods and services.
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