A three-hour board meeting of Unitech Wireless, the first one after former chairman Sanjay Chandra got bail in the alleged 2G telecom spectrum scam, ended on a note of disagreement between the two partners, according to people with direct knowledge of the development. The joint venture partners, Norwegian telco Telenor and Indian realtor Unitech, have been in the midst of a shareholders’ dispute over many issues, including funding.
On the rights issue, the disagreement continued, said a source. While Telenor wants to take the rights issue route to raise funds, minority partner Unitech is opposing it. At the meeting on Thursday, Unitech is learnt to have insisted on debt funding, saying it was available and a better option. But Telenor maintained its stand.
Telenor is the majority shareholder in Unitech Wireless, with a 67.25 per cent stake, while Unitech holds the rest. A source, who refused to be named, argued according to the shareholders’ agreement, the rights issue should be the last option to be explored and the debt route should be the first choice for the telco.
Unitech Wireless refused to comment on the meeting.
Sigve Brekke, the Asia head of Telenor, was among the four members from Telenor who attended the meet. Along with two others, Chandra represented Unitech.
Even as there was a buzz ahead of the meeting that there could be a discussion on reinstating Chandra as the chairman, people in the know said the matter didn’t come up at all. Telenor had wanted Chandra to step down as the Unitech Wireless chairman last April after his name got embroiled in the scam. While Chandra was replaced by a temporary chairman, he continues to be on the board of Unitech Wireless.
Sources indicated there was a consensus between the both partners on appointing chairmen for two committees, pricing and projects, for the telecom operation. Both sides are learnt to have agreed on getting Unitech nominees as chairmen for the committees.
Unitech had recently moved the Company Law Board, complaining against Telenor for mismanagement of operations. The decision to form committees on pricing and projects followed.
Telenor’s Pakistan connection and related security concerns also came up for discussions. Telenor clarified it had never engaged any official from Pakistan in Uninor, the India telecom brand run by Unitech Wireless. On Unitech bringing up Telenor’s Pakistan connection at this point, a spokesperson from the Norwegian firm said, “We are not surprised at both the nature and timing of such innuendos, coming as they do in the midst of a shareholders’ dispute.”
The spokesperson pointed out, “We run telecom businesses in the five Asian countries of Bangladesh, Malaysia, Pakistan, Thailand and India, as do several multinational companies operating in the telecom sector in India.” “As we do in each of these countries, in India, we are governed by the Indian laws, which we will always comply with. This is a matter of our principles and our reputation.” He said Uninor had sought permission to bring in further investment to India.
Telenor maintained it would focus on securing Uninor’s funding, referring to the rights issue. While Telenor may consider raising its stake to 74 per cent in the India operation, it’s not talking openly about a change in the partnership yet. Unitech Wireless got licences to start telecom services in India in 2008.
