Company Law Board asks Unitech to buy out Telenor's stake or exit JV

The Company Law Board, a quasi-judicial body that rules on corporate matters, on Tuesday directed Unitech Wireless to decide by March 19 if it wants to buy out the 67.25% stake held by Norway's Telenor, or exit their joint venture.

"You (Unitech) are given priority, whether you want to buy or sell (stake), you have to decide," CLB chairman Justice BR Deshmukh told Unitech.

"I see no other solution... what can be done, you have to decide, whether you want to buy or sell out [stake]," Justice Deshmukh added.

The CLB had earlier asked the warring partners to mediate to resolve their differences but both the companies did not opt for it.

Unitech declined to comment on the CLB's order. "We now await Unitech's response to CLB. Given that Uninor's licences have a limited validity of only three more months, we hope there will be no further delays and a clear position will be stated on Monday.

It is Telenor Group's intent to ensure that the Rs 4 crore customers, 17,500 workforce and business partners who today rely on Uninor's operations can seamlessly migrate to a new company that may then continue operations as a credible competitor in India," the Telenor spokesperson said.

Telenor and Unitech have been involved in a bitter spat over the last 12 months regarding funding their JV mobile phone company in India. The spat intensified after the Supreme Court in a February 2 order cancelled 122 licences issued by former telecom minister A Raja in January 2008. The Norwegian firm's Indian operation was one of the worst affected by the court's decision.

Following the apex court orders, Telenor served a divorce notice and sought compensation from Unitech for damages caused to their mobile venture, and also announced that it was forming a new company in India, and would be migrating its existing business, including customers and employees, into this entity. (Economic Times)