Abu Dhabi: UAE telecommunications major Emirates Telecommunications Corporation (etisalat) said on Tueasday its Indian mobile phone joint venture partner Majestic Infracon Private Limited has brought proceedings against it and various group companies before the Company Law Board in India and various individual directors.

Etisalat, whose Indian joint venture is grappling with a telecommunications licensing scandal, did not say what the proceedings were, but called them "wholly baseless".

"This is a cynical tactical move by parties charged with major corruption offences to shift attention away from their own situation and to disrupt the proper running of Etisalat DB to the detriment of its shareholders and customers," etisalat said in a statement.

Etisalat owns some 44.73 per cent of Etislat DB, while Majestic, a company controlled by Sahid Balwa and Vinod Goenka, owns 45.73 per cent of Etisalat DB.

Balwa, managing director of Etisalat DB until his recent resignation, and Goenka have been held in jail pending trial. The duo were among those charged by India's federal police over their alleged involvement in the telecoms lic-ensing scandal.

Etisalat said it had "no involvement in that licence process but was invited by Balwa, after an extensive process involving leading investment banks, to invest in Swan, which it did nearly a year after the licences had been awarded."

It said Majestic previously owned some 90 per cent of Swan during the period when Balwa managed a process whereby it was awarded 2G licences.

Etisalat said it is investigating closely both the circumstance in which Balwa persuaded it to invest in Swan (now Etisalat DB) — as a third party foreign investor, brought in after Balwa and Swan had obtained the licences — and also Balwa's stewardship of the company and its assets.

It added: "In essence, Majestic is seeking to increase its level of control over the affairs of Etisalat DB following various internal corporate developments. Etisalat will resolutely defend this action."

Etisalat's shares on the Abu Dhabi Securities Exchange closed yesterday at Dh10.85.

Etisalat's Acting Chief Executive Officer Nasser Bin Obood told reporters in May the company plans up to Dh15 billion capital investment in the UAE over the next five years to expand its infrastructure, which would include investments in information technology and the laying of cables.

  • 44.73%: etisalat's stake in Etisalat DB
  • 45.73%: shares of Etisalat DB controlled by Majestic
  • Dh10.85:  etisalat's share price in Abu Dhabi yesterday