Norway's Telenor to seek Indian compensation

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11:13 CEST+02:00
Norwegian telecom giant Telenor said Tuesday it was planning to seek compensation from India's government after a court last month decided to scrap its mobile phone licences.

India's Supreme Court scrapped 122 telecom permits, including 22 held by Telenor's majority-owned Indian unit, Unitech Wireless, on the grounds the 2008 licensing process was underpriced and rigged.

"While we haven't stated any amount, we do intend to seek compensation for all investment, guarantees and damages," Telenor spokesman Glenn Mandelid told AFP by email.

"We are hopeful that it remains the (Indian) government's intent to protect and encourage bona fide foreign investment in the country," he said.

The Times of India newspaper reported that Telenor may claim 700 billion rupees ($13.8 billion) in damages.

"The cancellation of licences, and the resultant loss of investments made by Telenor Asia constitute a breach of India's obligation," the Telenor notice to the government said, according to the newspaper.

The licence sales are at the heart of one of India's biggest corruption scandals in which former telecom minister A. Raja is alleged to have mis-sold the permits and favoured some firms, costing the treasury up to $39 billion.

Telenor previously said it was "considering all legal options" to resolve the problems embroiling its Indian subsidiary, which has 40 million customers.

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Telenor paid $1.1 billion for its stake in the Indian mobile firm when it entered the country in 2009. Other foreign investors whose licences were cancelled include Gulf-based Etisalat and Russian conglomerate Sistema.

The licence cancellations take effect in early June, after which new auctions are to be held to re-allocate the permits. Those companies whose licences were scrapped have the right to bid.

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