Indian Government has turned down request of Malaysian Axiata Group on the grounds it has a subsidiary in Pakistan called Multinet.
Malaysian Telecom Giant, which is also the owner of Multinet Pvt Ltd (Pakistan) has served notice to Indian Government for not safeguarding the foreign investor owing to biased policies of telecom regulator, Ministry and Indian Supreme Court.
Axiata has 19.69 percent share in India’s fourth largest mobile phone operator Idea Cellular. Axiata Group recently sought to increase the share in Idea Cellular by acquiring share from the stock exchange. Indian Government turned down the request on the grounds that Group has another subsidiary – Multinet- operating in Pakistan which has digital optic network across the country. Also, Multinet in partnership with Epsilon is providing inter-connect platform called E-connect hub for South Asia which provide exchange of voice and data traffic in addition to providing managed presence for local and international carriers, connecting to Epsilon’s Europe and Asia network.
Economic Times reports that Indian Home Ministry term this above arrangement as security risk for India therefore, it did not allow Axiata Group to buy more shares in the Idea Cellular.
In February 2012, Indian Supreme Court cancelled some 122 telecom licenses that included 13 licenses of Idea Cellular as well.
Axiata says, it is facing huge losses after the Supreme Court decision.
Indian Supreme Court has already given a deadline of August 31 for re-licensing the spectrum which it made available after the cancellation of 122 licenses.
In its notice to Indian Prime Minister, Telecom Minister and External Affair Minister, company says that it has the right to go into arbitration under the Indo-Mauritius Bilateral Investment Treaty if the issue is not resolved within six months. Axiata’s investment into India is routed through Mauritius.
