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Unitech moves CLB against Telenor
TT Correspondent |  |  12 Oct 2011

Real estate major Unitech Group has dragged its telecom parter Telenor to the CLB alleging mismanagement in operations of the joint venture by the Norwegian partner, giving another twist to the already strained relation between them.

 

Alleging that the actions of Telenor and its executives Sigve Brekke, Yogesh Sanjeev Malik, Richard Olav and Jan Edvard Thygensen, who are on the board of Unitech Wireless (Tamil Nadu) as "oppressive" and "malafide", the petition alleged that Telenor is not running the business in the best interest of the joint venture (JV).

 

Unitech Wireless is the telecom JV between Unitech and Telenor.

 

"The present action is being instituted in order to protect and safeguard the interests of the company whose affairs are being conducted in a matter prejudicial to its interests," the petition said.

 

Unitech Group''s petition would come up on Thursday for hearing, according to the officials of the Company Law Board (CLB).This petition is to also safeguard the rights of the Unitech and its subsidiaries which are being violated by Telenor and its executives in an oppressive manner, it added.

 

Telenor and Unitech have been involved in a public spat for the last few months over several issues, including management and funding of the joint venture.

 

Telenor Asia holds 67.25% stake in Unitech Wireless (which offers services under Uninor brand name), while Unitech through its associate companies holds the remaining 32.75% stake.

 

The petition alleged that Telenor and its key executives had failed to obtain project finance for Uninor, when it was available.

 

"During November 2010, Telenor had refused a long-term debt of Rs 9,000 crore from State Bank of India when it was available... Now having failed to obtain project finance, Telenor and its executives are seeking to cause the company (Uninor) to make a rights issue in direct violation of the Hierarchy of Funding incorporated in its Articles of Association," it said.

 

The spat over rights issue had also reached the courts and the companies were believed to be in an arbitration process in Singapore to resolve the matter.

 

A rights issue is a way in which a company can sell new shares in order to raise capital. Shares are offered to existing shareholders in proportion to their current shareholding, respecting their pre-emption rights.

 

Also, the petition said despite objections by the Unitech Ltd's nominee directors, Telenor and its key executives had caused Uninor to approve and adopt a ten years' business plan.

 

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12 Oct 2011(IST)  
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