Norway's Telenor has demanded that Unitech chairman Sanjay Chandra step down from the board of Unitech Wireless, their telecom joint venture. Chandra was on Wednesday arrested in the 2G spectrum scam.
Telenor suggested that he be replaced by another representative of the promoters.
Telenor said it had earlier this month sent a letter to Unitech Ltd asking Chandra to step down as the chairman of Unitech Wireless.
The letter was made public a few hours after Chandra was denied bail and sent to judicial custody for a week.
Telenor has a 67.25 per cent stake in Unitech Wireless. The rest is owned by the Chandra family, which controls the Unitech group.
The company operates mobile services in 13 circles under the Uninor brand name.
This shows growing tensions between the two partners. Last month, Unitech Wireless decided to go for a rights issue to raise funds for expansion.
This was opposed by the Chandras, who moved court and got a stay. Telenor has challenged this.
Glen Mandelid, communications director, Telenor Groepu, Asia, said "Withdrawing from the chairman's position is the most appropriate and decent thing for Chandra to do given the current circumstances. It is of vital importance that our Indian operation is not hampered."
"As a responsible shareholder, Telenor believes that Unitech, in the best interest of Unitech Wireless, should appoint a replacement for Chandra as soon as possible," he said.
The arrest could have repurcssions for Unitech Wireless, which has 10,000 employees (direct and indirect) and a subscriber base of 25 million -- about 4 per cent of the total GSM market.
Telenor has invested Rs 6,100 crore (Rs 61 billion) in Unitech Wireless to build a pan-India network. It has been one of the largest investors in telecom among the companies that got licences in 2008.
The CBI charge sheet named Chandra, besides Unitech Wireless, for actions when it was a fully-owned Unitech company, prior to us entering India, Telenor said.
"Telenor has zero tolerance for corruption and if the CBI trial proves any malpractice, those responsible must be brought to book," Mandelid said.
However, no charges had been proven and we expected Chandra to defend himself, he added.
