The government has expressed reservations over Etisalat DB’s proposal to increase its stake in Swan Telecom, citing security reasons. The home ministry is expected to file a detailed affidavit before the high court detailing why security clearance was denied to Etisalat DB to bring in investment.
Earlier, the Foreign Investment Promotion Board (FIPB) had rejected Etisalat?s proposal to pump in Rs 3.80 billion in India, following objections raised by the home ministry on the company?s presence in Pakistan and Afghanistan and Etisalat?s attempt to mount surveillance application software on Blackberry within the UAE in 2009. The home ministry also raised a red flag on the company’s backend technical tie-up with Huawei, which is founded by Chinese People’s Liberation Army officer and the company?s capacity to remotely manipulate the equipment it supplies to clients.
Etisalat plans to increase its stake in Etisalat DB Telecom by buying five percent stake from Genex Exim Ventures. Earlier, Etisalat brought 45 percent stake in Swan Telecom for a cash consideration of up to $900 million. Etisalat DB Telecom is a subsidiary of UAE-based Etisalat Telecommunications Corporation and has obtained UAS licenses for Andhra Pradesh, Delhi, Gujarat, Haryana, Karnataka, Kerala, Maharashtra, Mumbai, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh (East) and Uttar Pradesh (West).
