Before exiting the Indian telecom sector, Etisalat is taking action against its Indian joint venture partners on grounds of fraud and misrepresentation, say news reports.
The company has initiated legal proceedings against Vinod Goenka and Shahid Balwa, both promoters of DB Realty and Majestic Infracon Private Limited, a DB Group company.
In 2008, Etisalat had paid $900 million for a 45 per cent stake in Swan Telecom, later renamed Etisalat DB, with Majestic and other minority investors owning the rest.
Etisalat has issued a statement in this context, saying, ?Etisalat’s case is that it was induced into its investment in the company without any disclosure of the matters that are now alleged to have occurred in connection with the obtaining of 2G licences by Etisalat DB.?
“Those events occurred a year before Etisalat investment. Etisalat is facing very significant financial losses on its investment despite its having no involvement in the 2G licence application or award process and being entirely innocent of any allegations relating to it,”
Meanwhile, the company has decided to exit the Indian telecom space, the second company to do so, after Bahrain Telecommunications Company (Batelco).
