Europe's third-biggest telecom company also said that it had issued Unitech a notice of voidance of the current shareholders' agreement on 'account of fraud and misrepresentation'.
"This new entity will serve as the platform to approach the upcoming auctions for fresh licences as mandated by the Supreme Court. As a part of this process, the new entity will also seek requisite approvals from the Foreign Investment Promotion Board (FIPB) to allow Telenor Group to take up 74% ownership," Telenor said in a statement.
The Norwegian major's Indian operators, which offers mobile services under the 'Uninor' brand and has about 40 million customers, was one of the worst affected by the Supreme Court's decision earlier this month to cancel 122 mobile licences issued under a scandal tainted 2008 sale. Telenor has a 67.25% stake in the JV while Unitech owns the rest.
Telenor further said that it will try to ensure a smooth transition for 'Uninor employees, customers and stakeholders and it expects the board of its Indian entity 'to transfer Uninor's business into this new company at a fair market value'.
"Till such time that Uninor's business is transferred to the new Indian company, Uninor operations will continue as before," the Scandinavian telco added.
Minority partner Unitech, however, hit back and said it would fight Telenor's 'shocking' move even as it accused the Norwegian company of attempting to 'circumvent the noncompete provisions of the shareholders' agreement'.
"It is shocking that Telenor intends to transfer the entire business to a new affiliated entity owned by itself. This not only shows complete disregard and oppression of the minority shareholder by Telenor, but is also against all principles of related party transactions. Telenor cannot transfer any assets of Uninor without the consent of Unitech because we have veto right in the shareholders' agreement as well as in the articles of association for such matters," the realty firm said in a statement.
Unitech further added that it would take 'legal rights to protect its investments and rights available to us under the shareholders' agreement and the Indian laws'. Executives close to Unitech claimed that Telenor could not transfer any asset of Uninor as the realty firm held a veto rights. They further added that 75% shareholder votes were needed to transfer assets to a new company and also that Unitech could block this proposal at the upcoming board meeting.
Telenor immediately issued a subsequent statement that '75% shareholder votes are not needed since Uninor is a private company' and added that 'in a case of fraud and misrepresentation, it can unilaterally declare the shareholder agreement void'.
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