Telenor Group has said it will proceed with a rights issue of Uninor, its Indian joint venture with Unitech Ltd., despite an ongoing dispute with Unitech over the management and control of Uninor.
Telenor’s Q3 report said: “The board of directors of Uninor has approved raising of funds through a rights offering of up to $1.68 billion, which is now under process of being implemented. Unitech Ltd has initiated arbitration proceedings in Singapore on this matter.”
Referring to Unitech’s petition against it, Telenor said that Unitech “is alleging that (Telenor has) oppressed the minority shareholders and mismanaged the business of Uninor. Telenor’s opinion is that there is no legal or factual basis to support the claims and allegations made by Unitech Ltd. in the arbitration and (India’s Company Law Board) proceedings.”
On Oct. 11, Unitech filed a petition with the Company Law Board against Uninor, the Telenor-appointed directors on the Uninor board, Telenor Asia Pte. Ltd. and Telenor ASA.
In its Q3 report, Telenor also mentioned the 2G spectrum scandal controversy involving Uninor.
“In India, Uninor and many other telecom operators, as well as the federal government through the Department of Telecommunications and the Telecom Regulatory Authority of India, have been named as respondents in public interest petitions filed before the Supreme Court. These petitions seek cancellation of the licenses granted by the government in January 2008 to such operators, an imposition or punitive damages on grounds of alleged irregularities in granting the licenses, failure to meet eligibility requirements and delays in meeting rollout obligations,” the report said.
Telenor’s quarterly report also said that Unitech Managing Director Sanjay Chandra and Unitech Wireless were named in a charge sheet by India’s Central Bureau of Investigation for actions that allegedly occurred when Uninor — then known as Unitech Wireless — was fully owned by Unitech, before Telenor’s entry in India. According to the report, all people and companies named in the charge sheet were charged Oct. 22; the trial is scheduled to begin Nov. 11.