New Delhi: The Company Law Board (CLB) Thursday stopped auction of Telenor-controlled joint venture Uninor saying it was a "complete breach" of shareholding agreement by the Norwegian telecom giant with its minority partner Unitech.
Uninor had on August 1 invited potential bidders to express interest by August 6 to buy the joint venture and said its majority owner, Norway's Telenor, was willing to pay Rs 4,190 crore for its 30 million customers and assets in case no other bidder turns up. The move was opposed by Unitech, who moved the CLB.
The CLB said that the auction notice issued by majority held Uninor was "under the grab of transparency is an attempt by Telenor to dissuade any prospective bidder from participating in the auction and to be bid in the auction itself".
The CLB Chairman Justice D R Deshmukh further said that the auction notice did not even give sufficient time to the prospective bidder for mandatory due diligence.
It further said Telenor "was trying to avail a business opportunity for itself and not for the company (Uninor)" by inviting the auction through Uninor.
"The efforts to oust Unitech from Uninor and be able to single bid in the auction managed by itself contravenes the fiduciary duty of the Telenor Director.
"Under the auction notice what Telenor is striving to achieve is not a corporate opportunity for the company but a business opportunity for itself to the detriment minority shareholders which ought not to be permitted,"the CLB said.
Uninor is a 67:33 joint venture telecom company between Telenor and Unitech.
Commenting on the judgement, Uninor in a statement said that it would challenged the CLB's order in the higher courts to secure the interests of its customers, creditors and employees.
"Since the CLB order has now been pronounced, we are able to comprehensively move our arguments towards Uninor?s assets auctions to the higher courts," said Uninor.