Telenor, Unitech row deepens with ops transfer talks

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Telenor, Unitech row deepens with ops transfer talks

Wednesday, 22 February 2012 06:00

The spat between Norway’s Telenor ASA and its Indian partner Unitech Wireless deepened Tuesday with the former announcing it will be transferring operations to a new Indian company. Telenor has been functioning in India via Unitech Wireless, a joint venture with Unitech Ltd. in which Telenor holds 67.3% stake and that operates under the brand name Uninor. After the Supreme Court ordered Unitech to return all 22 licenses, forming part of the 122 licenses that the court deemed were secured in a rigged auction in 2008, Telenor hasn’t pulled its punches and had stated it sees no future with its current Indian partner and that it will seek compensation from Unitech for the breach of warranties related to the cancellation of mobile licenses. On Tuesday, while issuing a notice of voidance of the shareholders' agreement to Unitech, on account of fraud and misrepresentation related to the court judgment, Telenor said it’s looking to transfer its current business, along with its 40 million subscribers and 17,500 employees, to a new company. The telco stated "This new entity will serve as the platform to approach the upcoming auctions for fresh licenses as mandated by the [Indian] Supreme Court." It further said it expects Uninor's board to transfer Uninor's business into the new company at "a fair market value" and that shareholder voting isn’t required to transfer the business as Uninor is a private company. Unitech lashed out at the idea and said it is "shocking that Telenor intends to transfer the entire business to a new affiliated entity." "This not only shows complete disregard and oppression of the minority shareholder by Telenor, but is also against all principles of related party transactions," Unitech stated. It added that Telenor cannot transfer any assets of Uninor without Unitech's consent, and it has veto right in the shareholders' agreement and in the articles of association for such issues. "We will take all our legal rights to protect our investments and rights available to us under the shareholders' agreement and the Indian laws," Unitech said.

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