Unitech and Telenor have agreed to set up two committees to manage expenses and projects undertaken by Uninor. The two committees will be headed by the nominees of Unitech. This was agreed to by the two partners at Uninor's Board meeting held today.
Unitech had earlier moved the Company Law Board alleging mismanagement of Uninor. According to sources Telenor was managing all the key functions like expenses and projects with little input from Unitech. “Now the new pricing and project committees will ensure that both companies will be equal partners in decision making,” said a source.
But sources also added that the proposal to form such committees were already part of the shareholders' agreement signed by the two partners when Telenor picked stake in Uninor. They also said that the initial agreement had clearly stated that the head of such committees will be nominated by Unitech.
There are, however, differences between the two on the mandate of the two committees.
The differences between the two partners over rights issue persisted with Unitech opposing the move.
In November 2011, the Foreign Investment Promotion Board had cleared a proposal from Unitech Wireless' for a rights issue of Rs 8,250 crore. Telenor, in its proposal, had also told the FIPB that it plans to increase its holdings in Unitech Wireless to 74 per cent, and induct other partners if Unitech partner failed to subscribe to the rights issue.
Unitech on the other hand took a view that FIPB would not have cleared the rights issue if Telenor had disclosed complete details on its Pakistan operations. This issue was also raised in the Board meeting.
“The issue of Telenor's Pakistan links was also raised but differences persist on this as well,” said a source. They said that the shareholding agreement also listed out various ways to raise funds and the rights issue was listed as the last recourse.