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Unitech writes to FIPB against Telenor

Unitech writes to FIPB against Telenor

New Delhi: Real estate firm Unitech Ltd, which is in a pitched battle with estranged partner Telenor ASA relating to the funding of their telecom joint venture Uninor, has written to the Foreign Investment Promotion Board (FIPB) against the Norwegian telco’s application to bring in foreign direct investment (FDI) worth 1,200 crore for operational expenditure and loan repayment.

According to Unitech, Uninor wrote to FIPB on 12 June requesting that its FDI application dated 13 October 2011 be treated as a request for bringing in foreign investment up to 1,200 crore.

Unitech said the matter of the rights issue was the subject of an arbitration between the companies. “In fact, the proposed rights offer is in reality a preferential offer," it said.

Unitech also said Telenor has not adequately explained how it will not breach India’s 74% FDI limit for the sector by bringing in 1,200 crore.

“In this regard, Telenor must specify the fair valuation at which the so-called rights offer is to be made," Unitech said in the letter, adding that it had commissioned an independent valuation of the joint venture by Grant Thornton India Pvt. Ltd, which found the value to be 12,000 crore.

Telenor holds a 67.7% stake in the joint venture and Unitech owns the remainder.

Unitech has also asked that the work permits and security clearances of the foreign personnel working in Uninor be checked.

It also drew FIPB’s attention to various investigations being carried out by the Enforcement Directorate on alleged violations of foreign exchange rules.

In reaction to Unitech’s letter, a Telenor spokesperson said in an emailed statement, “It is unfortunate to note the misrepresentations being made with reference to the FIPB process initiated by Telenor. With the relevant authorities, Telenor will meet these distortions point by point with facts."

Telenor Group remains committed towards its operations in India and “will continue to pursue every measure available to safeguard their future," the spokesperson added.

shauvik.g@livemint.com

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