Emirates Telecommunications Corporation (Etisalat) has made a representation through the UAE government to request the Enforcement Directorate to withdraw a showcause notice over alleged violations of the Foreign Exchange Management Act (FEMA), insofar as it relates to the company and its directors on the board of its Indian joint venture Etisalat-DB Ltd. The UAE (United Arab Emirates) government owns 60 per cent of the Etisalat group.
The requests have also been conveyed to the Department of Telecommunications (DoT).
Last week UAE's Foreign Minister Sheikh Abdullah Bin Zayed Al Nahyan met India's External Affairs Minister S M Krishna and had wide-ranging discussions on strengthening economic ties between the two countries. When he visited India in January this year, Nahyan was given an assurance by the Indian government that foreign investments would be protected. Etisalat has already taken an impairment charge of $827 million (around Rs 4,500 crore) in its 2011 financial statement on its Indian assets.
Etisalat holds around 44.7 per cent stake in the joint venture with its estranged partner, DB Group, controlled by Shahid Balwa and Vinod Goenka, whose names have figured in the alleged 2G spectrum scam.
In their discussions, the UAE government has asked the Indian government to support the expeditious refund of the licence fee paid by the joint venture. The company has said it forked out $422 million (around Rs 2,296 crore) up to 2011, including the initial licence fee and other payments but excluding income tax.
It is also pushing for a refund of the liquidated damages that the joint venture company paid in protest to the DoT for not meeting its roll-out obligations, saying the damages were paid under a contract later declared null and void by the Supreme Court.
The company has also asked for a refund of all the cash margins (and interest accruing in respect of the same)
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