Telenor threatened with losing majority control of GrameenPhone

Norway’s Telenor is threatened with losing overall control of its Bangladeshi cellular subsidiary, GrameenPhone (GP), due to a dispute involving the Bangladesh government and the cellco’s minority stakeholder, Grameen Telecom, part of Grameen Bank. The Daily Star reports that the telco is worried about potential consequences of the state’s investigation of Muhammad Yunus, Grameen Bank’s founder, who it ousted as the bank’s managing director in 2011. A government commission issued a report last week alleging that GP’s original licence was issued ‘illegally’ in 1996, as it was issued based on a memorandum of understanding (MOU) before the shareholding partners had formally established a company, and subsequently transferred to GP. The report calls for Telenor to transfer a 16% stake – of its existing 55.8% holding – to Grameen Bank, which currently holds 34.2%, with the remaining 10% held by Bangladeshi institutional and retail investors. In its original MOU with Grameen Bank, Telenor said it would consider reducing its stake to 35% after six years of operation, with Grameen given the right of first refusal, although this option was not carried out. The commission report adds that if Telenor fails to transfer the 16% stake, GP’s licence should be ‘immediately suspended’. Telenor denies any improper conduct in obtaining the original licence (which it renewed last year), and notes in a statement that it is looking at all available legal options to protect its interests.