Chinese telecom equipment vendor ZTE Corp has initiated legal proceedings against Loop Mobile to recover outstanding payments of about $25 million (Rs 150 crore).
“It has come to our notice that Loop Mobile is entering into a business deal to transfer its operating assets (subscribers) to Bharti Airtel, without keeping us informed. To secure our business interests we have moved an application,” said ZTE Corp legal attorney Yuan Shen.
ZTE has approached the Bombay High Court to grant interim measure of protection for securing the outstanding amount. The Chinese company also wants Loop Mobile to deposit the amount in the form of fixed deposit or security deposit with the High Court.
Additionally, ZTE is also seeking a restraining order against Loop Mobile selling its business to any party without the court’s permission.
Loop Mobile, Mumbai’s oldest telecom operator, was in a business agreement with ZTE. Last year, the Chinese company filed a petition against Loop Mobile in Bombay High Court after the Mumbai-based GSM operator failed to clear the dues.
In February this year, Bharti Airtel announced its plans to acquire Loop Mobile, a move that will help the country's largest operator by subscribers, to strengthen its presence in the metro. Financial details of the deal were not disclosed.
Under the agreement, Loop Mobile’s 3 million subscribers in Mumbai will join Airtel’s more than 4 million subscribers. The deal was subject to regulatory and statutory approvals. Earlier media reports had pegged the deal size at Rs 700 crore.