Vodafone wins Indian court battle against $2.2 billion tax

Linda Young – AHN News Writer

New Delhi, India (AHN) – Vodafone Group Plc won a court victory in its 4-year tax battle against the demand by India’s government to pay $ 2.2 billion in taxes for its $ 10.7 billion purchase of Hutchison Whampoa Ltd. in 2007.

India’s Supreme Court ruled in Vodafone’s favor on Thursday, removing a major obstacle to Vodafone’s’ planned initial public offering listing of stock. Company officials said the tax dispute created an “uncertain” regulatory environment that prevented them from moving forward with an IPO.

The IPO could value the local Vodafone Essar wireless unit at as much as $ 17.6 billion.

Last year, Vodafone gained control of the local business venture by paying $ 5.46 billion to buy out partner Essar Group’s stake in it. India is the world’s second-largest wireless market.

Vodafone Essar’s 146 million customers represent a 17 percent market share. It is India’s third-largest wireless company behind Bharti Airtel Ltd. and Reliance Communications Ltd.

Vodafone is the world’s largest mobile-phone company.

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