Norwegian telecom major Telenor’s differences with its Indian partner Unitech in their telecom joint venture—Uninor — escalated on Wednesday after the Oslo-based company decided to auction its Indian assets for an undisclosed amount.
The biggest operator in Nordic countries Telenor wants to scrap the joint venture with Unitech and migrate its business to a new company to seek fresh operating licences as the joint venture’s 22 telecom permits were among the 122 quashed by the Supreme Court in February.
“The proposed auction of Uninor assets is a circuitous way for Telenor to transfer these assets to another one of its own entities.” Unitech claimed in a statement.
Uninor said it wants to auction the company’s business including its assets while it is a going concern before the September 7 deadline set by the Apex court for winding up of operations of all the firms whose licences had been cancelled.
Unitech nominees had vetoed the move to auction assets in the board meeting of Uninor. Courts in India have already held that the articles of Uninor cannot be disregarded.
Unitech said in a statement indicating that the company may initiate legal action if Uninor went ahead with the sale.
Whether the shareholder’s agreement can be unilaterally rescinded by Telenor is also a subject matter of arbitration between the shareholders and any decision by Telenor otherwise is prejudicing and circumventing this entire process it said.
Uninor said auction will allow the company to generate the maximum possible returns for its creditors and secure the future of Uninor’s customers, employees and business partners in the hands of new ownership.
Telenor Asia Pte ltd majority shareholder of the company has indicated its willingness to participate through an Indian affiliate entity in the auction of the business of the company Uninor statement said.
Uninor said an open auction will also remove any dispute around the real valuation of the Uninor business .
Valuation of Uninor has been a major bone of contention between Telenor and Unitech. Unitech is willing to exit Uninor but feels the valuation put by Telenor was a fraction of Uninor’s real worth. Uninor spokesperson said that the value realised from auction will be divided among stakeholders.
Telenor, which had accused Unitech of fraud and misrepresentation after the licence cancellation order contested Unitech’s claims that it had veto rights to block any asset transfer.