Etisalat starts winding up Indian operations
UAE-based Etisalat today said it has started proceedings for winding up operations of its Indian venture, but it was not clear if its Indian partners
Shahid Balwa and Vinod Goenka had consented to the move.
March 13, 2012 / 09:34 IST
UAE-based Etisalat today said it has started proceedings for winding up operations of its Indian venture, but it was not clear if its Indian partners Shahid Balwa and Vinod Goenka had consented to the move.
Following the Supreme Court order cancelling its 13 licences last month, Etisalat had decided to shut down Etisalat DB Telecom (formerly Swan Telecom), affecting over 16.7 lakh mobile subscribers."Recent events have led to a complete breakdown in the relationship between Etisalat and its Indian partners, Shahid Balwa and Vinod Goenka, who face various criminal charges of corruption associated with Swan's acquisition of its UAS licences," Etisalat said in a statement.It added that the company was "completely unaware of any issues or risks associated with the licences" which were already owned by Swan when it made its investment.Since then, Etisalat has sued Shahid Balwa, Vinod Goenka and Majestic Infracon Pvt Ltd (formerly Tiger Trustees Pvt Ltd) for fraud and misrepresentation associated with soliciting Etisalat's investment in Swan.Balwa and Goenka could not be immediately reached for comments. Etisalat said it was no longer possible for EDB to continue its telecommunications operations since there is a lack of capital and the commercial position."Majestic is unable to meet the funding requirements of EDB's business ... The Majestic appointed directors on the board of EDB, Hussein Balwa and Vinod Goenka, have refused to cooperate further in the management of EDB and have placed the company in an impossible position by tendering their resignations," it added.Etisalat said due to these circumstances, the entire basis for EDB's operation no longer exists and therefore "EDB has decided to shut down its network, and has given the appropriate notices to the Indian authorities."Etisalat DB's 16.7-lakh strong subscriber base is spread across 15 circles, including Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Mumbai and Punjab.On February 9, Emirates Telecommunications Corp (Etisalat) had also written off about USD 820 million worth value of its Indian operations by way of an impairment charge as an after effect of Supreme Court order. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
