Nahata, Dhoots in telecom feud

Nahata, who holds the stake in Datacom through a closely-held company called Jumbo Techno Services, plans to take Videocon to the courts for violating the shareholders' agreement. Videocon, on its part, has filed caveats in various courts so that it is made party to any legal action initiated by Nahata.

A court battle could delay the launch of the service, slated for August 15, and also Datacom's plans to raise funds from strategic investors. The company has already held talks with Dubai-based Etisalat and Batelco of Bahrain, according to informed sources.

Jumbo Techno Services Director AK Jain told Business Standard: "To protect our legitimate rights in Datacom and to protect the shareholders' value, we might be left with no option but to take legal action." Venugopal Dhoot, the chairman of the Videocon group, was unavailable for comment.

Datacom had received a pan-Indian licence to run GSM-based mobile telephone services during the last round of spectrum allocation a few months ago. At that time, the company was fully owned by Nahata and some other investors. Subsequently, Videocon came in as a 64 per cent partner.

The Dhoot brothers have had an eye for a while on the world's fastest-growing telecom market and had also applied for spectrum. But their application reached the department of telecom after the cut-off date for new licences. So, they bought 64 per cent in Nahata's company through their flagship, Videocon.

Under the agreement, said sources in the know of the deal, the two partners agreed to subscribe to an initial equity capital of Rs 150 crore. The Dhoots also agreed to put in further equity investments of around $1 billion (almost Rs 4,200 crore at current exchange rates), which would be required to set up the network infrastructure.

Sources in the other camp said that though Nahata was not required to make such further investment, his stake would remain intact at 36 per cent