The Delhi High Court has ordered the department of telecommunications (DoT) to furnish an affidavit on the exact shareholding structure in JT Mobiles, the cellular operator in Karnataka, Andhra Pradesh and Punjab.
There is a dispute over the ownership of 20 per cent of the firm's equity between Parasrampuria Credit & Investments Ltd (PCIL) and the London-based RK Associates. The court gave the order while hearing a case filed by PCIL, challenging a DoT move to allow the transfer of the disputed 20 per cent equity from RK Associates to United Telecom Ltd (UTL), one of the promoters in the consortium. If this equity transfer is ultimately ruled legal, UTL's stake in JT Mobiles will be 31 per cent.
The court order has put DoT in a spot. On January 27, the DoT brass had disregarded the recommendations of a committee set up to study the JT Mobiles case and taken a decision in principle to allow the company's promoters to transfer the disputed 20 per cent equity to UTL.
The panel had rejected JT Mobiles' contention that the transfer of the 20 per cent equity held by RK Associates to UTL in April 1997 did not violate any tender condition. The transfer, it argued, was a violation of the licence condition for cellular service providers, which stipulates that the company's original equity partners must hold at least a 10 per cent stake in it for a lock-in period of three years. Subsequently, on March 10, the DoT brass granted JT Mobiles ex post facto approval to increase UTL's equity holding. What has raised eyebrows is that the department reversed its stance of 1997 and early 1998. During that period, it had held that the transfer of the 20 per cent equity to UTL was not legal. JT Mobiles was also allowed to transfer the Punjab cellular licence to Evergrowth Telecom Ltd (EGTL), its wholly owned subsidiary. The Ruias-owned Essar Telecom have a management contract to run the operations in Punjab under 'Essar Cellphone' and is expected to take over the company as it has advanced Rs 98 crore in the form of convertible debentures to EGTL.
JT Mobiles is a joint venture between Sanmar Electronics (20 per cent equity), PCIL or RK Associates (the disputed 20 per cent), UTL 11 per cent, Telia AB of Sweden 26 per cent, Bangkok-based Jasmine Telecom 13 per cent and Telecom Authority of Thailand 10 per cent. However, the final transfer of equity in JT Mobiles has not been effected because the company has not fulfilled certain conditions laid down by DoT.
It is yet to pay as much as Rs 540 crore in licence fees to the Union government. The payment was supposed to have been made by May 30.
Early in July, DoT invoked a Rs 12.5 crore bank guarantee of JT Mobiles for non-payment of licence fees for the Karnataka cellular licence. It is reportedly considering encashing the company's total bank guarantee of Rs 125 crore. However, this move has been stalled by JT Mobiles, which got a stay order from the Delhi High Court against the DoT move.
