Real estate major Unitech has filed a petition before the Company Law Board (CLB) against its joint venture partner in the telecom business, Telenor, for alleged mismanagement by the Norway-based company and its key executives.
The growing tension between the two shareholders of Unitech Wireless, which offer services under the brand name Uninor, was out in the open after Unitech Wireless had decided to go for a rights issue to meet its expansion plans, but Unitech challenged the decision in the Punjab & Haryana High Court and managed to get a stay. The court had recently lifted the stay. Both companies are also involved in an arbitration process in Singapore.
Telenor, which holds 67.25 per cent in the joint venture, had said the rights issue was planned to secure long-term funding, after the banks had stopped giving loans to the telecom sector, following the 2G spectrum controversy. Apart from former telecom minister A Raja, many corporate heads, including Unitech’s managing director Sanjay Chandra was sent to jail for their alleged involvement in the scam.
In the petition last November, Unitech had said Telenor had refused a long-term debt of $1.8 billion (Rs 9,000 crore) from the State Bank of India and was seeking to “enforce” a rights issue. Unitech said the joint venture did not need funds and Telenor and its executives were not running the business in the best interest of Uninor and its workforce.
The memorandum of articles of Uninor said the company should exhaust all other available funding prior to floating a rights’ offer. Telenor and its key executives had also failed to obtain project finance for the company in accordance with the mandate of Articles of Association when it was available, the petition had alleged.
Despite objections by Unitech’s nominee directors, Telenor and its key executives have caused the company to approve and adopt a 10-years’ business plan, which is outright unilateral, malafide, self-serving, premature and aimed at artificially depressing the valuation of the company, the petition added.
Telenor did not reply to an email query. The Norway-based company had entered India by picking up a majority stake in Unitech Wireless in 2009.
TELENOR RISES
Telenor ASA rose to its highest in five months in Oslo trading after media reports that Unitech has offered to buy Telenor’s 67 per cent stake in Uninor. Telenor added as much as 3.8 per cent to 95.4 kroner (Norwegian currency), the highest intra-day price since May 19, in early trade.
Tanuja Kehar, a Unitech spokeswoman, would neither confirm or deny the bid when contacted by Bloomberg. Tor Odland, a Telenor spokesman, said he had “no particular comment” on the reports and added the company’s position on financing remains the same.
