2G scam: Etisalat investigating situation that lead investment in Swan

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UAE based telecom Etisalat on Monday said it is investigating the circumstance under which Shahid Balwa, one of the accused in 2G spectrum issue, persuaded it to invest in Swan Telecom.

"Etisalat is investigating closely both the circumstance in which Mr Balwa persuaded it to invest in Swan (now Etisalat DB) – as a third party foreign investor, brought in after Mr Balwa and Swan had obtained the licenses – and also Mr Balwa's stewardship of the company and its assets," Etisalat said in a statement.

The company said this in reaction to move of Majestic Infracon to Company Law Board against Etisalat and various group companies.

Majestic Infracon is said to be controlled by Balwa and Vinod Goenka. Both Balwa and Goenka are accused in the ongoing 2G spectrum case.

Majestic Infracon in its litigation filed before Company Law Board has reportedly blamed Etisalat for delay in roll out of telecom business and not complying with its obligations to the DB-Etisalat joint venture.

As relief Majestic Infracon wants to stop alleged mismanagement and get the JV back on track.

"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," Etisalat said in the statement.

Etisalat added that the management of Etisalat DB has been made dramatically more difficult by Balwa and Goenka being in prison and by the approach taken by them to its business.