Emirates Telecommunication Corporation (Etisalat) has spoken out against proceedings brought forward by Majestic, its joint venture partner in its mobile operations in India.
Majestic, which owns 45.73 per cent of Etisalat DB, formerly known as Swan Telecom, has accused Etisalat of mismanagement of the company and has brought the Abu-Dhabi based company before the Company Law Board in India.
In a statement issued to the press, Etisalat referred to the proceedings as “baseless” without outlining the details.
“This is a cynical tactical move by parties charged with major corruption offences to shift attention away from their own situation and to disrupt the proper running of Etisalat DB, to the detriment of its shareholders and customers.”
This is a further blow for the UAE operator. On 9 July, the Indian authorities accused Etisalat of foreign exchange and foreign direct investment violations worth about $1.6bn. India’s Enforcement Directorate accuses Etisalat of increasing its stake in Swan Telecom to 49 per cent without seeking approval from regulators, but in the statement Etisalat says it owns just 44.73 per cent of DB.
Etisalat DB has also been embroiled in the telecommunications licensing scandal in India, where the former Minister for Telecommunications Andimuthu Raja undersold the second-generation (2G) licences, which lost the country about $39bn.
Majestic’s vice-chairman, Shahid Balwa, and director, Vinod Goenka, are currently in jail, pending trial for their involvement in the scandal and bribing ministry officials.
In the statement, Etisalat reiterated that it was not involved with the process of securing India the licence, as it only invested in the company a year after the licence was awarded.