Telenor auction bid irks partner
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- Published 2.08.12
|Rift wide open|
New Delhi, Aug. 1: Telecom operator Telenor has said it wants to auction its Indian joint venture Uninor, deepening a row between the Norwegian firm and local partner Unitech Ltd which is opposing the sale.
Telenor wants to scrap the joint venture while it is still a “going concern” and migrate the business to a new company to seek fresh operating licences.
In February, the Supreme Court had revoked Uninor’s pan-India permit; the mobile player will have to stop operations by September 7.
Unitech, which owns just under a third of the joint venture, has opposed Telenor’s move, saying the Norwegian company cannot unilaterally scrap the agreement and it has veto rights to block any asset transfer. Telenor controls 67.25 per cent of Uninor.
The joint venture — Unitech Wireless (Tamil Nadu) Private Limited — has called potential bidders to express their interest by August 6, according to a public auction notice circulated today.
Telenor is willing to participate in the auction through an Indian affiliate company, the notice said. If there is just one bidder, Telenor will have the right to fix the bid price at a “fair market value” of Rs 4,190 crore, the notice added.
Unitech’s nominee directors on the joint venture’s board have “recorded their dissent” to such an auction, according to the notice.
A spokesperson for Unitech said his company would take “legal action” against the proposed auction.
Sources said Unitech might move the Company Law Board to seek a stay on the auction.
Telenor, which had accused Unitech of “fraud and misrepresentation” after the licence cancellation order, contested Unitech’s claims that it had veto rights to block any asset transfer.
“As regards Unitech’s veto rights, we believe these are automatically forfeited once it is established that the shareholders’ agreement and all rights enshrined in it, was based on fraud,” Telenor spokesperson Glenn Mandelid said in a statement.
“We are willing to establish this in court, should the need arise,” it added.
Telenor is already at odds with Unitech over various management issues. Last month, Unitech opposed Uninor’s plans to bring in Rs 1,200 crore as part of the rights issue that was approved last year.
The Telecom Disputes Settlement & Appellate Tribunal (TDSAT) today dismissed Vodafone’s plea challenging the government’s guidelines on the liberalisation of 2G spectrum in the forthcoming auctions.