Unitech files petition against partner Telenor

Unitech group has dragged its mobile joint venture (JV) partner, Telenor to the Compnay Law Board. In its petition, Unitech, which holds around 38% in Uninor, has alleged that Telenor is deliberately depressing the value of the JV to nullify Unitech's investment reports Siddharth Zarabi of CNBC-TV18.

Telenor and Unitech have been at loggerheads over a planned USD 1.7 billion rights issue in the joint venture, which trades under the Uninor brand name. Telenor owns 67.25% of the joint venture and Unitech owns the remainder. Telenor has said the rights issue is to secure long-term funding for the venture as bank loans to the telecoms sector have dried up after a graft scandal. Unitech, which is India's No 2 listed property firm, said Telenor last November refused a long-term debt of Rs 90 billion (USD 1.8 billion) from India's top lender State Bank of India and was now seeking to "enforce" a rights issue. Unitech said the joint venture does not now need funds. It also said Telenor and its executives were not running the business in the best interest of Uninor and its workforce. A Telenor spokesman for Asia did not return calls. The joint venture Unitech Wireless and Unitech's managing director, Sanjay Chandra, are among the three companies and 14 people charged by the Central Bureau of Investigation (CBI) in a massive telecoms licensing scandal. All accused have denied any wrongdoing. Telenor has said the events described in the CBI charges predate its investments in India. The Company Law Board is an independent quasi-judiciary body that rules on corporate matters. (With inputs from Reuters) Also watch the accompanying video.