Etisalat sues Indian joint venture partners for fraud

February 23rd, 2012 - 8:42 pm ICT by IANS  

New Delhi, Feb 23 (IANS) Abu Dhabi-based telecommunications company Etisalat Thursday launched legal proceedings against its Indian joint venture partners for fraud and misrepresentation.

Following the Supreme Court’s order last month cancelling 122 telecom licenses which included 15 of Etisalat DB, the Emirates company moved Bombay High Court against Swan telecom promoter Shahid Balwa, Dynamix Balwas (DB) Group Chairman Vinod Goenka and Majestic Infracon, a DB company.

“Etisalat’s case is that it was induced into its investment in the company that was then Swan, without any disclosure of the matters that are now alleged by the CBI (Central Beureau of Investigations) and Supreme Court to have occurred in connection with the obtaining of 2G licences by EDB,” Etisalat said in a statement.

“Those events occurred a year before Etisalat’s investment,” it added.

The firm, which Wednesday announced plans of shutting down its India network, also said it was facing significant financial loss on its investment in Etisalat DB “despite having no involvement in the 2G license application or award process”.

The Emirates firm said Balwa, Goenka and Majestic Infracon were responsible for Swan at that time and for subsequently marketing the investment opportunity to Etisalat.

In 2008, Etisalat bought a 45 percent stake in Swan Telecom for $900 million. At the time, Swan was promoted by the DB Group.

Etisalat’s move came close on the heels of another foreign player Telenor severing its ties with Unitech by issuing a notice for indemnity and seeking compensation for all investments, guarantees and damages caused by the Supreme Court order.

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