Etisalat starts winding up Indian biz
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UAE-based Etisalat on Monday said it has started proceedings for winding up operations of its Indian venture, but was not clear if its Indian partners, Mr Shahid Balwa and Mr Vinod Goenka, had consented to the move.
Following the Supreme Court order cancelling its 13 licences last month, Etisalat had decided to shut down Etisalat DB Telecom (formerly Swan Tele-com), affecting over 16.7 lakh mobile subscribers.
“Recent events have led to a complete breakdown in the relationship between Etisalat and its Indian partners, Shahid Balwa and Vinod Goenka, who face various criminal charges of corruption associated with Swan’s acquisition of its UAS licences,” Etisalat said in a statement.
It added that the company was “completely unaw-are of any issues or risks associated with the licen-ces” which were already owned by Swan when it made its investment.
Since then, Etisalat has sued Mr Balwa, Mr Goenka and Majestic Infracon Pvt Ltd (formerly Tiger Trustees Pvt Ltd) for fraud and misrepresentation associated with soliciting Etisalat’s investment in Swan. Mr Balwa and Mr Goenka could not be immediately reached for comments.
Etisalat said it was no longer possible for EDB to continue its telecommunications operations since there is a lack of capital and the commercial position.
“Majestic is unable to meet the funding requirements of EDB’s business ... The Majestic appointed directors on the board of EDB, Hussein Balwa and Vinod Goenka, have refused to cooperate further in the management of EDB and have placed the company in an impossible position by tendering their resignations,” it added.
Etisalat said due to these circumstances, the entire basis for EDB’s operation no longer exists and therefore “EDB has decided to shut down its network, and has given the appropriate notices to the Indian authorities.”
Etisalat DB’s 16.7-lakh strong subscriber base is spread across 15 circles, including Andhra Pradesh, Gujarat, Haryana, Karnataka, Kerala, Maha-rashtra, Mumbai and Punjab.
On February 9, Emirates Telecommunications Corp (Etisalat) had also written off about $820 million worth value of its Indian operations by way of an impairment charge as an after effect of Supreme Court order.
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