Board of directors of Unitech Wireless to clear name today
Jayesh Desai, CEO of Unitech Infrastructure, is expected to be appointed interim chairman of the Board of Directors of Unitech Wireless, following the arrest of Sanjay Chandra in the 2G spectrum case last week.
According to people close to the development, Desai’s appointment has to be cleared in the meeting of board of directors of Unitech Wireless tomorrow.
Unitech Wireless is the telecom firm of Unitech and offers mobile services under the brand name Uninor. Norway’s Telenor holds a majority stake in the joint venture with Unitech. The Telenor Group today welcomed the replacement.
“As stated earlier, Telenor Group has only asked that Sanjay Chandra steps down for as long as the 2G court case is ongoing,” a statement of the company said. The matter will be taken up in the next board meeting and suitably addressed.
Following the arrest of Chandra, Telenor had asked Unitech to appoint a substitute, the MD of Unitech Ltd and chairman of board of directors of Unitech Wireless, so that it does not impact its Indian operations. This is a reflection of the growing tension between two shareholders of Uninor, the joint venture between Telenor and Unitech. The discord had started when Uninor had decided to go for a rights issue to meet its expansion plans, but Unitech had challenged the decision in court and managed to get a stay. However, Uninor had also challenged this. The matter is pending in the court.
Currently, Uninor has an employee base (direct and indirect) of 10,000 with a mobile subscriber base of 25 million. Telenor has already invested Rs 61 billion in Unitech Wireless and holds a 67.25 per cent stake in the joint venture.
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Unitech was among the nine new companies who were issued mobile licenses in 2008. A Comptroller and Auditor General (CAG) report last year said the six newly-incorporated applicant companies of Unitech group had suppressed facts and provided incorrect information to get the licenses. The department of telecommunications had issued 85 showcause notices to the companies, including Unitech, asking why their licenses should not be cancelled.
The alleged irregularities in the allocation of 2G spectrum had caused a notional revenue loss of Rs 1.76 lakh crore to the government, according to the CAG report.