Telenor notifies India of compensation intention

NORWEGIAN MOBILE phone group Telenor will seek compensation from India if a dispute over the cancellation of its Indian unit’s telecoms licences cannot be resolved.

Telenor’s Indian unit is one of several firms set to lose their operating permits in early June after the country’s supreme court last month ordered all 122 licences awarded in a scandal-tainted 2008 sale to be revoked.

Telenor spokesman Glenn Mandelid said yesterday that the firm had not stated a specific compensation amount in its letter to New Delhi, but planned to seek compensation for “all investment, guarantees and damages”.

“We are hopeful that it remains the government’s intent to protect and encourage . . . foreign investment in the country,” he said.

The Times of India reported that Telenor was seeking nearly $14 billion in damages. This would be far more than the 140 billion rupees (€2.28 billion) Telenor says it has invested in India.

The scandal was over alleged irregularities in the way telecoms licences were awarded in 2008, with a state auditor saying they were issued at “unbelievably low” prices that it said may have cost New Delhi much as $34 billion in lost revenue. A former telecoms minister, who had presided over the sale process, and several corporate executives have been charged by federal police.

Telenor said it informed the Indian government of its “intent to invoke” the provisions of the so-called Comprehensive Economic Co-operation Agreement between India and Singapore. The Norwegian firm owns the stake in the Indian joint venture through its unit registered in Singapore.

Telenor wants a solution within six months or will seek international arbitration for failure to protect its investment in the country, said the Times of India, citing a notice it said was sent to the prime minister’s office as well as to the telecoms and corporate affairs ministries.

The prime minister’s office could not comment, while telecoms secretary R Chandrashekhar said his office was yet to receive the notice. Corporate affairs minister M Veerappa Moily said he was yet to see Telenor’s letter, according to a Press Trust of India report on the Hindu Business Line newspaper’s website. – (Reuters)