The Emirati Telecommunication firm Etisalat is facing a major legal claim by Majestic Infracon Private, the Emerati telecom firms' partner in Etislat DB, a joint venture into the Indian mobile market. The firm could be facing $1.6 billion in fines for foreign exchange violations. Etisalat released a statement today calling the accusations “wholly baseless.” The Emirati firm has holdings in the Sudanese and Egyptian telecommunication markets. Two directors at Etislat DB, Shadhid Usman Balwa and Vinod Goenka, filed the claim. The Indian press reported that the allegations include that Etisalat didn't fulfill management obligations. Etisalat has a 44.73 percent share in Etisalat DB. Balwa and Goenka are both in jail after corruption charges related to bribing officials to obtain licensing for mobile phone networks. Etisalat's press release characterized the lawsuit as a “cynical tactical move by parties charged with major corruption offences to shift attention away from their own situation and to disrupt the proper running of Etisalat DB to the detriment of its shareholders and customers.” According to the Wall Street Journal the venture has not been doing well, with only less than a quarter of a percent of the 840 million Indian mobile subscribers. An analyst with Informa Telecoms and Media told the national that “fierce competition” in the Indian Market is holding back expansion. The lawsuit has not affected Etisalat's share price, according to the Abu Dhabi-based English daily The National. BM
