x Abu Dhabi, UAESaturday 20 January 2018

Etisalat Indian unit faces charges

Etisalat expects its Indian operation to 'resolutely' defend charges in an alleged corruption scandal involving 2G mobile licences.

Etisalat expects its troubled operation in India to "resolutely" defend itself against charges laid on Saturday.

An Indian court formally framed corruption-related charges against Swan Telecom and 16 other parties in connection with the allocation of India's second-generation (2G) mobile phone licences.

Etisalat acquired a stake in Swan Telecom for US$900 million (Dh3.3 billion) in March 2009. The company was later renamed Etisalat DB, and the UAE firm owns a 44.73 per cent stake.

Swan Telecom and parties including a former telecommunications minister and Bollywood filmmaker now face trial over the allegations of corruption, which date back to 2008, before Etisalat made its acquisition.

"Etisalat had no knowledge of any wrongdoing in the licence application process for Swan and had no involvement in it," Etisalat said in a statement issued to the Abu Dhabi bourse.

The company added that it expected its Indian operation to fight the charges. "Insofar as Etisalat has been able to investigate the position, it has not established any basis for the charges levied against EDB and it expects EDB to defend the charges resolutely."

Alok Shende, a founder director at Ascentius Consultingin India, said he was "not surprised" that the court had laid charges.

He said that the charges, which were also made against a number of former Swan Telecom promoters, would not necessarily affect EDB financially.

"The charges that have been framed are under the criminal law under the penal code," Mr Shende said. "It does not by itself indicate any financial liability that will accrue to the firm."

Shares in Etisalat, which are traded on the Abu Dhabi Securities Exchange, closed down 0.1 per cent yesterday at Dh9.98.