ZTE seeks to restrain Loop's asset sale

The company had, in June 2013, moved the Bombay High Court with a petition against Loop Mobile over unpaid dues worth $25 million

Chinese telecom company ZTE Corporation on Wednesday said it had moved the high court here against Loop Mobile, seeking to restrain the latter from entering into a deal with Bharti Airtel before its dues were paid.

The company moved the court in June last year against Loop over dues worth $25 million. “It has come to our notice that Loop is entering into a deal to transfer its operating assets to Bharti Airtel, without keeping us informed about this. To secure our interests, we have moved an additional application to the high court for the recovery of the dues,” company representative Yuan Shen said.

In February, Loop’s owners decided to sell the company’s assets and subscribers to Bharti Airtel for Rs 700 crore.

Besides seeking grant for an interim measure of protection for securing the outstanding amount, the Chinese company has said that the Court should direct Loop Mobile to deposit the amount in the form of fixed deposit or security deposit with the Bombay High Court.

The amount to be deposited in the Court shall be equivalent to the total claim of ZTE Corporation from Loop Mobile. Also, ZTE has requested the Bombay High Court to pass an order directing attachment of all sums payable by Bharti Airtel to Loop Mobile and restraining Loop Mobile to sell its business to any party without permission of the court, ZTE said in a statement.

Last year, ZTE Corporation had also initiated arbitration proceedings against Loop Telecom as the Mumbai-based telecom operator failed to clear payments worth about $ 3.2million. Loop Mobile and Loop Telecom were in business agreements with ZTE Corporation and ZTE India, for the supply and services of GSM equipment.

The contracts were signed in 2009. Loop Mobile has operations in Mumbai circle, and its sister entity Loop Telecom, which had acquired licences in 21 circles, lost all its permits after the Supreme Court quashed 122 telecom licences in a verdict on 2 February 2012. In April 2012, Loop Telecom closed down its operations in 13 circles where it had started operations since 2008.