Etisalat blames Majestic Infra for Etisalat DB creditor's woes

UAE-based telecom company Etisalat today blamed its Indian joint venture partner Majestic Infracon, which is promoted by 2G scam accused Shahid Balwa and Vinod Goenka, for the woes of Etisalat DB's creditors and channel partners.

"The Etisalat Group empathises with the creditors of EDB (Etisalat DB) and stresses that these are matters that have been triggered by the behaviour of Majestic Infracon, including its refusal to fund the company further," Etisalat said in a statement.

Etisalat DB had announced that it will shut down its operations in India following Supreme Court order that cancelled 122 2G licences, including 15 licences that belonged to the company. Etisalat holds around 44.7 per cent stake in the company.

The company added that Majestic Infracon removed its director from the board with no replacements.

"...culminating in an express refusal by Majestic to play any further part in the management of EDB. Those actions have placed EDB in jeopardy at a time when it is subject to multiple, very substantial, claims by its creditors," the statement said.

EDB has issued a formal communication today informing all of its channel partners that there is a hearing before the High Court of Bombay on April 11 2012, which will consider their claims, it added.

"Whilst it is a matter for the Hon'ble Court to determine who should make representations to it, EDB has declared it has no objection to channel partners attending the hearing as creditors of EDB and making any submissions they wish to promote their case," the statement said.

Etisalat said that EDB is a board-run, joint-venture company in which Etisalat Group has a minority stake.

"As of February 2012, all of the Board Members from the majority partner, Majestic Infracon (Vinod Goenka and Shahid Balwa) have resigned - one of the core contributing ingredients for the complaints that EDB faces today," the statement said.

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