New Delhi: UAE-based Etisalat on Thursday said the company never obtained control of Etsialat DB (EDB) because authorities in India did not permit it to pay control premium to its Indian partner Majestic Infracon (MIPL) on alleged credibility concerns of its promotor Shahid Balwa.
"A control premium was not paid to Majestic/Balwa as Etisalat never obtained control. The Indian Authorities did not permit it because they were concerned about the standing of Mr Balwa, including allegations of his links to underworld figures," Etisalat said.
MIPL owns around 45.73 percent of Etisalat DB (formally Swan) whose all telecom licences had been cancelled by the Supreme Court. Etisalat holds around 44.7 percent of Etislat DB.
According to a MIPL statement, Etisalat had to pay subscription money and control premium which is in excess of USD 400 million and had not been paid to it.
It said that the decision to shut down operations of EDB following the Supreme Court order was taken by Etisalat nominees in the companies though MIPL directors had opposed it.
"Thereafter, we were shocked to see Etisalat's nominee directors unilaterally deciding to pass an illegal resolution to immediately shut down the operations of EDB without any prior notice to us despite the ILD, NLD and ISP licenses still being valid," MIPL said.
MIPL added that its nominee directors on the board of EDB resigned alleging "acts of omission and commission, deliberate incorrect recording of minutes and blatantly false allegations of Etisalat".
Etisalat has alleged that whatever status of the company is due to resignation of MIPL directors with no replacement besides the refusal to fund the JV culminating in an expression of refusal by Majestic to play any further part in the management of EDB.
MIPL on the other hand has held Etisalat responsible for the current status of EDB.
"Etisalat is and its representatives have, at all material times, been in complete control including by virtue of their majority on the Board of EDB, and hence responsible for EDB's current state of affairs," MIPL said.

MIPL further alleged that since the inception of EDB, Etisalat "wasted" the JV's money.
"Amongst other matters, they (Etisalat) deployed several expatriates as employees of EDB at huge salaries who would travel back to UAE every week, which was objected to by Majestic as bad business practice, and being against the best interests of EDB," MIPL statement said.
Majestic said it will be initiating legal proceedings against Etisalat for defamation, breach of trust and under other provisions of law.
Etisalat has filed proceeding for winding up EDB operations in the Bombay High Court but MIPL has said the petition filed by Chief Financial Officer, Pratap Ghose, in this regard was not authorised by EDB.
Statements made by Etisalat and MIPL have referred to a police complaint filed by EDB's channel partner against Ghose for recovery of dues.
Etisalat's statement said it is assisting the Indian police with their enquiries in respect of a complaint filed by a channel vendor creditor.
Neither Shahid Balwa nor Vinod Goenka, who are both facing charges in respect of the 2G scam, or individuals connected with them, were named in it, the statement added.