Sunday, Feb 26, 2012
(this story was originally published on Thursday)
DUBAI (Zawya Dow Jones)--Emirates Telecommunications Co., or Etisalat, said Thursday that it has started legal action against the promoters of India's Swan Telecom claiming its investment in the company was made without the Swan representatives disclosing irregularities in the 2008 allocation of telecom licenses and radio bandwidth.
"The Emirates Telecommunications Corporation--Etisalat has issued proceedings in the Indian Courts against Mr Balwa, Mr Goenka and Majestic Infracon Pvt Ltd for fraud and misrepresentation," Etisalat said in an emailed statement. "Mr Balwa, Mr Goenka and Majestic Infracon Pvt Ltd were responsible for Swan at that time and for subsequently marketing the investment opportunity to Etisalat," it added.
Majestic Infracon, a DB Group company, and its founders' Vinod Goenka and Shahid Usman Balwa couldn't be reached for immediate comments.
Swan Telecom Pvt. Ltd., as Etisalat DB was known before Emirates Telecommunications bought into the company, has been named an alleged beneficiary by India's federal investigator in a $7 billion irregularity in the 2008 allocation of telecom licenses and radio bandwidth. The company has denied any wrong doing.
"Those events occurred a year before Etisalat's investment. Etisalat is facing very significant financial losses on its investment in EDB despite its having no involvement in the 2G license application or award process and being entirely innocent of any allegations relating to it," Etisalat said in Thursday's statement. "Mr Balwa, Mr Goenka and Majestic Infracon Pvt Ltd were responsible for Swan at that time and for subsequently marketing the investment opportunity to Etisalat".
Etisalat said that given the seriousness of the allegations, and in light of the order on charge and Supreme Court decision, it has taken legal action to protect its interests and those of its shareholders.
-By Shereen El Gazzar, Dow Jones Newswires; +971 444 61684; Shereen.elgazzar@dowjones.com
(R. Jai Krishna in New Delhi contributed to this article.)
Copyright (c) 2012 Dow Jones & Co.
(END) Dow Jones Newswires
26-02-12 0342GMT
