Etisalat issues proceedings for winding up of Etisalat DB Telecom

Telecom Lead Middle East: Mobile service provider
Etisalat has issued proceedings for the winding up of Etisalat DB Telecom (EDB)
in India in order to ensure proper and orderly end to the business of EDB that
is supervised by the Indian Courts. This follows the February 2 supreme court


A number of recent events led to a complete breakdown in
the relationship between Etisalat and its Indian partners, Shahid Balwa and
Vinod Goenka, who face criminal charges of corruption associated with Swan’s
acquisition of its UAS licences. 


Etisalat advises Mobile Number Portability to India telecom


Recently, Cheers Mobile, the brand of Etisalat DB, has
advised its customers to transfer their mobile number to another operator prior
to the scheduled suspension of Cheers Mobile services on 31/03/2012.


According to a statement from Etisalat, Etisalat was
completely unaware of any issues or risks associated with the licences which
were already owned by Swan when it made its investment. 


Etisalat has sued Shahid Balwa, Vinod Goenka and Majestic
Infracon (formerly Tiger Trustees) for fraud and misrepresentation associated
with soliciting Etisalat’s investment in Swan. 


Majestic is unable, or unwilling, 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. 


In addition, the Supreme Court in India has cancelled all
UAS Licences issued in 2008, for reasons associated with the policy and
approach to their issue, with effect from June. 


For so long as this decision is effective, in addition to
the impossibility of running a business with Majestic and Messrs, Shahid Balwa,
Hussein Balwa and Goenka, the lack of capital and the commercial position make
it no longer possible, as a matter of law and practical reality, for EDB to
continue its telecommunications operations.


In all these circumstances, the entire basis for EDB’s
operation no longer exists. EDB has decided therefore to shut down its
network, and has given the appropriate notices to the Indian authorities.
As a leading telecommunications company with a reputation for integrity and
ethical behavior, Etisalat has instructed its representatives on the EDB board
to ensure, as far as is practicable, that the winding up of EDB is properly
conducted under Indian law and the various interests of all stakeholders are
properly managed in accordance with the law.


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