‘Probably the biggest loss for a Norwegian firm in foreign investments ever'
Maintaining its interests have been “innocently harmed” due to adverse developments in the Indian telecom sector, Norway on Saturday said any failure of Telenor’s $3 billion investment in India will have political implications.
“Telenor is not just any company. 54 per cent of the shares are owned by Norwegian people through state and thus, it has even further political implications that such a company will be harmed.
“If this investment fails, it will be probably the biggest loss a Norwegian company has in foreign investments ever. I think also it will be fair to say that it will influence the view of India as an investment country,” Norwegian Trade and Industry Minister Trond Giske, told reporters in New Delhi.
Mr. Giske is the representative of Norwegian government on the board of Telenor, which holds 67.25 per cent stake in telecom operator Uninor. The balance is held by realty major Unitech.
As many as 22 licences of Uninor were among the 122 licences cancelled by the Supreme Court on February 2, 2012 issued during the tenure of the then Telecom Minister A. Raja. Uninor has permits to operate till September 7, 2012.
Mr. Giske added that Norway and India share good bilateral relations and expressed hope that the issues will be resolved soon.
“Bilateral relations between India and Norway are strong and they can handle any challenges. It might have effect on investors but government to government cooperation continues throughout all problems,” Mr. Giske said.
“This situation after the Supreme Court ruling with the withdrawal of licences and proposals from the Telecom Regulatory Authority of India for new auction, have created obstacles to our future engagement,” he said.
To continue its telecom operation, Telenor needs to acquire new licences and win spectrum through the upcoming auction. However, the company has expressed concern over the auction proposals of the telecom regulator.
TRAI had suggested a base price of Rs. 3,622 crore for one megahertz (MHz) for pan-India spectrum. This is around 10 times higher than the price at which 2G licences bundled with 4.4 MHz spectrum were allocated in 2008 during Mr. Raja’s tenure.
According to TRAI’s recommendations, a minimum of 5 Mhz spectrum should be allotted, which means that pan-India airwaves in 1800 MHz band will cost Rs. 18,100 crore.
Telenor has objected to the high base price recommended by TRAI along with network rollout obligations and the quantum of spectrum proposed for auction.
Mr. Giske said the Norwegian government fully respects the rights of Indian institutions’ to take decisions but have “innocently harmed” the interests of Telenor and Uninor.
“I think it is truly possible to strike a balance and find a common ground where both Supreme Court decisions are fully respected, revenues to the Indian government is secure and competition and good service are provided to customers through participation of Telenor,” Mr. Giske said.
Unfortunate that Norway - with one of the highest Human Development Index ratings in the world & with one of the lowest corruption rating in the world is trying to perpetuate the exact opposite attitudes in a third world country. Would they allow licenses to be sold at those rates in their own country for the sake of GDP? Any thing goes in 3rd world.
Thats what you get with MNC's. Vodafone brought in Dutch govt and MTS - Russian govt. Even with aircrafts boeing etc. respective govts were having concerns.
Cant blame... Hope we remember when Polaris official was arrested in Indonesia.. whole nation was looking at what Indian Govt is going to do for this.
So much venom against Telenor is unfounded. Norway has one of the best
govt's in the world, as well as one of the best living standards, far
better than our ineffectual UPA. Its only natural that they should try
to get the best deal for their people. When there is a booming market
in a country where corruption reaches to the very highest levels of
government, its almost impossible to ignore that market, even if you
have to shut your eyes at some point.
As for the kidnapping charge, its (ie the actions of the CWS) no
different from what we should do if we catch a foreigner kissing in a
temple or taking pictures of cremations against the wishes of locals.
That our police are mostly ill-paid persons with little self-respect
is another matter.
I am not sorry for Telenor or Norway. Let the Norwegians leave India with their tail between their legs. It is quite clear that Norwegians do not know how to do business. They kidnap Indian children, and release them, expecting a payoff. I don't think Telenor should be accommodated in any way.
In the recent times: first it was the Italian government that muscled their way into getting their marines released from a murky 'MURDER' scandal of Indian fishermen, now even Norway seems to be making a threat with such open political statements? When did anyone say that ever business venture has to be a successful one, just because their economy is under a serious threat in the midst of a European recession, does not given them any more leverage into demanding a successful business outcome with their investments? They should have thought about it before trying to take advantage of a corrupt bureaucracy that they thought they could buy out. Too bad that got blown out of proportion? Write off your losses buddies, time for you to take a hit :)
No matter what Norway thinks, ruling of Supreme Court shall stand tall unless the government comes up with an ordinance that is very unlikely..
Those who got the bribes are going to be the winners.They need to investigate not only A Raja but also heads of Congress and DMK parties. CBI needs to track the money trail.Pranab dada is in no mood to go after black money! 2G scam investigation, prosecution and conviction is headed nowhere. Govt lost revenue, SC cancelled the licences, Telenor et al are going to approach arbitration or international courts for justice, Govt will have to bow down to pay compensation out of Tax payers' money. The one who took the bribes will get away.
Folks, Will you accept the same thing if it happened in your country? If any Indian company is involved in that i am sure you will not allow people to go for justice. Leave dual notes on the issue. When TRAI fixed some price per Mhz of spectrum, blindly they cannot do that and so many experts might have involved in it. Instead of threatening Indian government saying it will lead to political implications, identify what you can do and what best you can achieve. You have to abide to Indian Law as this is happened in India and should be prosecuted according to IPC, and don't relate the same to India - Norway relation.
Basically, Telenor got the licence 10 times cheaper than the minimum estimated price and it is using the name of good relation to bargain for such precious national resource. SO is Norway govt stating that why not follow the corrupt process, and get them their benefit. So if they benefit by this corrupt practise, it good investment sense, otherwise the Indian govt/Indian supreme court is not good.
Telenor's investment is not a fail. The basic bid still stands testimony to good faith and it just happens that it became part of a larger mismanagement. There is a requirement now to rework all the bids based on the profits to be earned on their future business acumen which is of course not predictable but hopefully positive. The government themselves cannot project that they lost a pile of projected profits. They should work out their share. A massive or very big exercise.
Telenor should have been careful and done its due diligence in selecting its partner. The choice of Unitech was the reason for all the problems that Telenor is facing. Telenor should have selected a more reliable and trustworthy partner for its Telecom venture into India.
Let this be a lesson for other Foreign investors - to shun businessmen who claim "Political" connections to do business in India. Foreign investors would be better off being establishing their presence thru 100% ownwership - like Hyundai, Samsung, BMW rather opting for JVs with unscrupulous partners.
This is sheer arm twisting and black mailing.An investor in businesses ought to know the conditions in which he is making it.He should also be prepared to bear responsibility for investing or making an Enterprise,founded on quick sand. When he reaps profits in processes, which went against Law,He should also be ready to accept losses incurred , through such means.Innocent investment by a company does not take place.It is a syndrome of 'I AM ALWAYS RIGHT and I AM ONLY RIGHT'. Brow beatings should not be accepted.
Indian government and policy makers should respond in the same equivocal tone that there
is no negotiation with regards to Supreme Courts judgement. All ways and means can be
explored as long as shall the law of the land is respected. It can be reasonably assumed
that Telenor & or Uninor had agreed to abide by the Indian laws when they first entered the
Indian telecom sector way back in 2008.
lets see if 1,170,938,000 citizen's strong democracy bend down before Norway's just 4,885,240 people democracy. There is a much bigger questions, do we allow a third world country to play fraud with poor Indian people. Do we want to base ‘political relations" to protect the fraudulent act of a third world country and ditch our own people who gave mandate to the UPA & its allies to run country?
I hope the people understand this - there is strong negative energy emerging globally against investing or doing any business in India. People quote a variety of reasons for this feeling.
I believe the primary reason is really the lack of understanding and consideration for global business practices. India is going to lose if we keep treating legitimate business ventures with such lack of consideration.
Global companies are making investments believing their investments will be protected by laws governing India. India however changes the rules of the game based on sentiments and politics on any given moment. We are already losing and WE WILL LOSE if we keep treating the businesses like our enemies.
The corruption in India is not due to these global companies. I have worked in several companies and every one of them have strict policies in place against corrupt business practices.
India cannot punish the businesses for lack of government discipline.
With a weak government at the center evry country is threatening us, Norway, Italy, Sri Lanka and many more. Shame on this government that is only busy with money matters.
That is how news should be reported. Issue with all it's details is clearly put forward
by the reporter without taking sides, or criticizing any of the bodies involved.
See, how multinational threaten us for their business. They should be allowed to leave the country and we better live with self respect.
It is more important for India to clean up corruption than attract
investment.
Throw is garbage outside india at once. Telenor knowingly participated
in A Raja's and unitech's grand spectrum ponzy scheme. And now it wants
a level ground for it begin again. What a load of garbage.
Norwegian apprehensions about India as an investment destination in future are unfounded. Norwegians should appreciate that Indian are keeping their house in order,and it would be in every ones interest if Government of India, makes money for its people, through a proper auction.
2G spectrum allocations have been through a farcical process, handled by crooks.
Telenor can shove its attitude up its ass. You cannot indulge in
corrupt practices and also ask for suitable pricing after being caught.
Mr.Giske is right to be worried about the impact of this back in his country. But he should tell Telenor/Uninor to play by the rule books of Indian law and not the Indian politicians. Surely he is not suggesting that because it is Norway and its people's impression of India, we should close one eye and let things proceed as normal?
To hell with the perception about India as an unfavorable investment destination. Stop seeing us as $$$$$/Money. Start respecting us as people/human beings.
Jai Hind
“I think it is truly possible to strike a balance and find a common ground where both Supreme Court decisions are fully respected, revenues to the Indian government is secure and competition and good service are provided to customers through participation of Telenor,” Mr. Giske said.
Did he explain how?
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