Law ministry refuses to give opinion on Unitech Wireless merger

NEW DELHI: The Law ministry has backed out from giving its opinion on the merger of eight companies into Unitech Wireless in 2009.

The Unitech Group had bagged pan-India mobile permits in 2008 under eight different firms and had later merged these into a single entity called Unitech Wireless Tamil Nadu Ltd. The company, which is now in majority owned by Norway’s Telenor, offers mobile services under the ‘Uninor’ brand. The telecom department (DoT) had recently said that the company did not obtain its approval for the merger and alleged that the telco had violated existing rules that prohibit a mobile phone company from holding more than 10% stake in two telcos operating in the same region.

The law ministry, in its response to the DoT, has said that merger ‘is a question of fact that has to be determined by the telecom department from its records'. It also added that the DoT may seek clarifications from the corporate affairs ministry on this issue.

The DoT had sought the law ministry’s opinion as the Delhi High Court had already approved the merger of these eight companies in September 2010. The department has alleged that the merger also violated the April 2008 merger guidelines, which prohibited new entrants from selling stakes within three years of obtaining licences. It had planned to appeal against the merger in the High Court after obtaining the law ministry’s opinion.

The Uninor spokesperson had earlier told ET that the company was not aware of the DoT seeking legal opinion on the merger, while adding that telco was in full compliance of the existing rules and would be happy to answer any queries on this matter.

Earlier this year, the communications ministry had obtained a stay on the 2008 merger between mobile phone companies, Idea Cellular and Spice Communications from the Delhi High Court, citing the same violations. The DoT had claimed that the Aditya Birla Group firm violated laws by holding more than 10% stake in two mobile companies operating in the same regions. Idea holds overlapping mobile permits in six telecom circles after its acquisition of Spice Communications in October 2008. In this case too, the Delhi High Court had approved the Idea-Spice merger in January 2010.

But the department had moved the court after it got the backing from Additional Solicitor General Amarjit Singh Chandhiok, whose legal opinion had suggested that Idea held more than 10% stake in two different mobile phone companies. His opinion had further added that Idea Cellular and Spice Communications also violated the April 2008 merger guidelines, which prohibited new entrants from selling stakes within three years of obtaining licences.