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The Emirates Telecommunications Corporation (Etisalat) has commenced legal proceedings against the promoters of Swan Telecom for alleged fraud and misrepresentation, leading to cancellation of its 2G licence. The UAE-based company has named Mr Shahid Balwa, promoter, Swan Telecom; Mr Vinod Goenka, Director, Swan Telecom; and Majestic Infracon Pvt Ltd in its petition filed in the court.
“Etisalat's case is that it was induced into its investment in the company that was then Swan, without any disclosure of the matters that are now alleged by the CBI and Supreme Court to have occurred in connection with the obtaining of 2G licences by Etisalat DB,” the company said in a statement.
Etisalat is facing significant financial losses on its investment in the Indian venture. The company claimed that it had no involvement in the 2G licence application or award process and was entirely innocent of any allegations relating to it. “Mr Balwa, Mr Goenka and Majestic Infracon Pvt Ltd were responsible for Swan at that time and for subsequently marketing the investment opportunity to Etisalat,” the company said.
TDSAT blow
This development comes even as the Telecom Disputes Settlement Appellate Tribunal today issued a notice to Etisalat DB on Reliance Infratel's plea seeking to recover Rs 1,200 crore from the operator. The Anil Ambani group company told the tribunal that Reliance Infratel was under pressure after the recent developments concerning Etisalat DB.
On Wednesday, Etisalat said that it was shutting down its Indian operations following the Supreme Court's decision to cancel its licences. Etisalat was operating through a joint venture with Dynamix Balwas Group in 15 circles and had 1.67 million subscribers in December.
The company added that it will take a decision on its future participation in the Indian market when there is clarity on the auction process and regulatory certainty.
“The decision has been taken in order to protect the interests of all stakeholders and to avoid incurring further costs,” said a company statement. Etisalat had already written off $827 million in Indian operations by way of booking an impairment charge.
“There is no wrong doing by us or our directors. Our joint venture went nowhere under Etilsalat management. Etisalat will be held responsible for its wrongful acts,” said a statement on behalf of Mr Balwa and Mr Goenka.
Other foreign players affected by the Supreme Court ruling to cancel 122 licences have also taken legal recourse.
High-level Meeting today
Meanwhile, top Government functionaries are expected to meet on Friday at North Block in a bid to decide the next course of action. According to sources, the meeting will be attended by the Communication and IT Minister, the Finance Minister, the Attorney General and the Planning Commission Deputy Chairman, among others. The group will likely take a view on whether or not to file a review petition against the Supreme Court order.
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