DoT mulling USD58m fine for Uninor

17 Apr 2014

The Department of Telecommunications (DoT) may impose a fine of up to INR3.5 billion (USD57.94 million) on Uninor for failing to secure the watchdog’s approval when it combined seven separate units into a single company in 2010, the Economic Times writes. The DoT claims that the amalgamation equated to a stake sale by the company’s promoters, taking the stance that the shareholders sold all their shares in the respective units for the merger to go ahead. This transaction would have been illegal however, as the terms of the licence forbids promoters from selling their stakes in telecom providers for three years or before the company meets rollout obligations. The seven divisions, then operating under the Unitech Wireless name, had been granted their concessions in 2008 and had not satisfied their rollout requirements by the time of the merger in 2010, rendering the transaction illegal in the eyes of the regulator. For its part, the operator claims to have followed the necessary procedures and secured permission from the Delhi High Court before combining the various units, a spokesperson for Uninor adding: ‘Four years ago, Unitech Wireless had conducted this amalgamation that we believe was in accordance with the applicable laws and licence terms, following the due process, subsequent to a favourable order from the High Court and keeping all government authorities notified as required at each step.’ However, the paper quotes an internal DoT note as saying: ‘The [seven Unitech Wireless] companies, however, did not follow the laid down procedure in the licence agreement… and ignored the letter written by the telecom department to the company.’

India, Department of Telecommunications (DoT), Uninor (Telewings),

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