The Supreme Court has rejected an order of the
Prior to this, the district court had, on March 1, 2011, barred Unitech Wireless from giving effect to any board resolution regarding the passing of a rights issue to raise about Rs 67 billion, on the request of four minority shareholders, Unitech Limited, Cestos Unitech Wireless, Simpson Unitech Wireless and Acorus Unitech.
Thereafter, the order was challenged by Unitech Wireless and its majority shareholder Telenor in the High Court, which on July 4, rejected their request and upheld the district court order saying that there was no need to intervene.
Unitech Wireless and Telenor Asia PTE had filed two separate petitions in the apex court, challenging the High Court?s order.
Telenor holds 67.25 per cent stake in Unitech Wireless, while the remaining 32.75 per cent stake is collectively held by the four aforementioned shareholderers.
While Unitech Wireless? board had proposed the rights issue, Unitech and three others had opposed it and moved to court.
In its final orders, the district court had given the green signal to arbitration between them and had extended its interim order of March 1, until the arbitrators settled the dispute.
Both firms had informed the High Court that to meet their roll-out obligations, the company needed funds worth Rs 67 billion and had failed to get assistance from any financial institution.
In their petition, the firms stated, “When it was clear that in the present circumstances prevailing in the telecommunications industry, any funding through long-term loans was practically impossible to avail, the management of the petitioner (Telenor and Unitech Wireless) recommended its board that the necessary funding be obtained by raising additional share capital through a right issue.?
This was opposed to by the four shareholders, on grounds that it was against the shareholding agreement between them.
