Just after announcing exit from Indian telecom market, Etisalat sues promoters of Swan Telecom

By Telecom Lead Team: The Emirates Telecommunications Corporation-Etisalat
announced it is moving court against Shahid Balwa, Vinod Goenka, and Majestic
Infracon for fraud and misrepresentation, an official statement from the company
said.

The announcement comes just after the company revealed it
will quit from Indian telecom market.

The UAE-based firm had paid $900 million in 2008 for
acquiring almost 45 percent stake in Swan Telecom, which was later renamed
Etisalat DB (EDB).

Etisalat argued that it was induced into its investment
in Swan, without any disclosure of the matters that are now alleged by the CBI
and Supreme Court to have occurred in connection with the obtaining of 2G
licences by EDB. This, according to Etisalat, was misrepresentation of facts,
as these events occurred a year before Etisalat’s investment.

Further the company also emphasized that it was facing
financial loss due to 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. Mr. (Shahid)
Balwa, Mr. (Vinod) Goenka and Majestic Infracon were responsible for Swan at
that time and for subsequently marketing the investment opportunity to
Etisalat,” said a press statement from the company.

Etisalat takes $829 million hit on Indian mobile income

Etisalat announced that it would take a $829 million hit on
its Indian income after the Supreme Court cancelled all 15 mobile permits held
by the Gulf carrier’s joint venture.

Given the seriousness of the allegations, and in the light
of the Order on Charge and Supreme Court decision, Etisalat has taken this
action to protect its interests and those of its shareholders,” the company
said in a press statement.

Etisalat’s decision to quit Indian market will
affect about 1.67 million subscribers and its employees. Most of its mobile
users are in northern India. The pullout will impact about Rs 2,500 crore in
bank loans to the company.

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