The fight between Norwegian mobile operator Telenor and its minority Indian partner Unitech is out in the open. As if reacting to Telenor group CEO Jon Fredrik Baksaas? statement recently that if Unitech did not subscribe to the company?s rights issue, Telenor would look for a new partner in India, Unitech on Tuesday moved the Company Law Board alleging gross mismanagement of the JV company, Uninor.

The bone of contention is a R9,000-crore rights issue to fund the expansion of Uninor in which Telenor holds 67.25% stake with the balance being held by Unitech. While the Uninor board has approved the rights issue on which the stay order procured by Unitech from a lower court in Gurgaon has been lifted by the Punjab and Haryana High Court; Unitech is against it and wants the expansion funded through debt.

In its petition before the CLB, Unitech has slapped a number of charges against Telenor, which is involved in the day-to-day running of Uninor being the majority owner. The allegations range from flawed corporate government practices, inaccurate recording of board meetings, flouting the articles of association to mismanagement of the company.

Alleging foul play on part of Telenor, Unitech’s petition has complained that the Norwegian firm’s board nominees were following oppressive and malafide actions. Raising money through equity is one of the ways in which it says Telenor has overridden the rights of the minority shareholder. ?In November 2010, Telenor had refused a long term debt of R9,000 crore from State Bank of India when it was available?, the petition cites while questioning that when it had already refused the debt why was the company now going for a rights issue.

Unitech has said that the joint venture does not now need funds and that Telenor and its executives had made the joint venture approve a 10-year business plan, which was aimed at artificially depressing the valuation of the venture. Unitech has also said that Telenor and its executives were not running the business in the best interest of Uninor and its workforce.

Responding to the Unitech’s move, a Telenor spokesperson said, ?There was an unsuccessful attempt earlier to block the rights issue through a legal process that went up to the Supreme Court of India. As we have done earlier, we will present the facts in this new legal initiative taken by Unitech. The simple case here is that the Uninor board, having followed prescribed processes, has asked its owners to invest more in the company in the absence of bank loans. We continue to urge Unitech to join us in meeting this shared responsibility towards the company. Valuations, being a part of the rights issue process, are legally confidential between the owners and we would like to maintain that confidentiality on our part. Uninor has already emerged as the most successful new operator in India by far and Telenor Group will not allow any of this to disrupt its continued progress?.

Telenor?s group CEO Baksaas had told FE on September 23 that ?if Unitech does not participate in therights issue then the question of looking for a new partner in India emerges?. Baksaas had also said: ?Every partner needs to participate in the rights issue. Unitech needs to participate as it needs to realise its obligations to the company. Currently Telenor is the guarantor for the all the company?s debt and therefore the burden on Telenor?s shoulders is larger. It is Unitech?s obligation to finance the company through the rights issue as per agreements?.

Telenor and Unitech have for some time now differed over raising funds for the company?s expansion through a rights issue opposed to any further fund raising through debt.