A day after Etisalat, the United Arab Emirates-based telecom operator, announced plan to exit India to ‘save cost’, it has slapped legal notices on Shahid Balwa and Vinod Goenka, the promoters of DB Group, and Majestic Infracon, ‘for their involvement in the 2G licences fraud’ which led to the cancellation of 15 licences of their joint venture Etisalat DB.
Etisalat said the basis of the notices is the case that it was “induced into investing in the company that was then called Swan Telecom without any disclosure of the matters that are now alleged by the Central Bureau of Investigations and Supreme Court to have occurred in connection with the obtaining of 2G licences by EDB.”
Those events occurred a year before Etisalat invested, it said, and as a result, it faces significant financial losses.
“Balwa, Goenka and Majestic Infracon were responsible for Swan at that time and for subsequently marketing the investment opportunity to Etisalat,” it said.
Kunal Bhakta, an investment banker, feels Etisalat as a company may also have to be liquidated in order to pay its own dues.
Etisalat said it has taken the step in order to protect the interest of its stakeholders.
Goenka, Balwa and Majestic, in an email response, said no notice of demand or suit papers have been received by them from Etisalat.
“There is no wrongdoing by us or our directors. We had filed a case for mismanagement in the Company Law Board against Etisalat, who were in management control of the joint venture. This was withdrawn because in discussions they said they would run it properly, which was not done,” they said.
“The joint venture company is also facing FEMA proceedings for the investments by Etisalat,” they said.
