Unitech Wireless: Tax Authorities Have Taken Control Of Unitech Ltd's Shares In Company
03/28/2012| 07:17am US/Eastern
India's income tax department has taken control of Unitech Wireless Ltd. shares held by three Unitech Ltd. (507878.BY) units, the telecom service provider said Wednesday, adding that the move won't affect its operations.
It wasn't immediately clear why the shares were attached, or what the next course of action by either Unitech Wireless or the tax department would be.
But media reports suggest the tax authorities took the step because the three Unitech units--Acorus Unitech Wireless Pvt. Ltd., Cestos Unitech Wireless Pvt. Ltd. and Simpson Unitech Wireless Pvt. Ltd.--owe INR7.01 billion in taxes.
Unitech Wireless is at the center of a tug of war between joint venture partners: Real estate company Unitech Ltd.--through its units--owns 33% of Unitech Wireless, while the rest is held by Norway's Telenor ASA (TEL.OS).
Unitech wireless offers mobile-phone services under the Uninor brand and has about 40 million subscribers.
"We wish to clarify that this has nothing to do with the running operations of Uninor, [nor does it have] any effect on them," the telecom company said.
However, the news impacted Unitech Ltd.'s shares, which closed 3.5% lower at INR27.80 in a Bombay Stock Exchange market down 0.8%.
The tax department's move comes at a time when Unitech is embroiled in a legal dispute with partner Telenor over control of the joint venture. Unitech has approached the Company Law Board, a quasi-judicial body, to resolve the dispute.
The dispute between Unitech and Telenor boiled over after India's Supreme Court on Feb. 2 ordered the scrapping of 122 mobile-phone licenses--including 22 belonging to Unitech Wireless--issued without auction since January 2008, saying the allocations were rigged and underpriced.
--By Dhanya Ann Thoppil, Dow Jones Newswires; +91-9886929464; email@example.com