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The ministry of external affairs (MEA) has raised questions about Norway-based telco Telenor’s alleged involvement in the 2G spectrum case, under investigation, leading to the deferment of its new joint venture proposal by the Foreign Investment Promotion Board (FIPB).
Telenor South Asia Investments Pte Ltd in Singapore had sought FIPB’s approval for its proposal to pick up 74 per cent in Telewings Communications Services Pvt Ltd, a joint venture with Lakshdeep Investments and Finance Pvt Ltd. The projected foreign direct investment (FDI) inflow in the new joint venture was to be more than Rs 1,500 crore.
Earlier, the Norwegian telco had a joint venture with real estate giant Unitech group, in which it had a 67.25 per cent stake and which had operating permits in 22 telecom circles. However, differences arose between the partners after Unitech Managing Director Sanjay Chandra came under scrutiny by the Central Bureau of Investigation (CBI) in the 2G scam.
After Telenor lost all its licences in India after a Supreme Court order in February 2012 quashing 122 telecom permits of various operators, it decided to bid in the fresh spectrum auction through its new entity, Telewings Communications Services Private Limited, to continue its India operations. It won fresh spectrum in six circles for Rs 4,018 crore.
MEA said a Letter Rogatory (letter of request) had been forwarded to the authorities in Singapore. Exchange of information with regard to investigation on the involvement of Telenor Asia Pte Ltd in 2G spectrum case is underway, it added. The investigation of the 2G spectrum case is still going on. It is alleged that Telenor Asia Pte Ltd worked closely with Unitech Ltd, which has been under scrutiny for various issues in Singapore by investigation agencies .
MEA has also said that the Department of Telecommunications (DoT), in 2008, had allotted Unified Access Service (UAS) licences to the group companies belonging to Unitech Ltd. These UAS licences were subsequently offloaded to Telenor Asia Pte for Rs 6,100 crore ($1,356 million) and Telenor Asia became the major shareholder in Uninor, according to MEA.
FIPB has observed that the mode of infusion — subscription to fresh shares or acquisition of existing shares or a combination of both — is not clear and the issue needs clarification. It has decided to share MEA’s observations with the home ministry and deferred the proposal. Earlier, the department of industrial policy & promotion had given its ‘no-objection’ to Telenor’s proposal.
Glenn Mandelid, director of communications, Telenor Group (Region Asia) told Business Standard: “As we have maintained, our investments have, and shall always be, conducted in full compliance to the regulations and law. This is a matter of principle. Beyond this, it will not be proper of us to comment on internal government processes. Through our company Telewings, we have secured fresh spectrum through auctions in six circles. The FIPB approval is about being able to raise our ownership in Telewings beyond the current 49 per cent, which we plan to do once allowed.”
On Wednesday, the Empowered Group of Ministers (EGoM) had decide that the government would allow Telenor to adjust the spectrum charges (November auction) with the entry fee of Rs 1,658 crore that Unitech Wireless, its previous operating company in India, had paid for the pan-India operating permit in 2008. This was not allowed earlier as Telenor had bid in the auction in November 2012 through a new company, Telewings Communications, and not through Unitech Wireless which was a joint venture between Telenor and Unitech Group.
