ByCell

ByCell India is investment company, for 74% belongs to the Swiss offshore ByCell Holding behind which as the company claims, there are certain "Russian investors".

Conflict with the Indian government

The government of India, being based on the recommendation of Council for promotion of the foreign investments (SPII), made the decision to withdraw all earlier issued ByCell India companies of permission to investment into national economy. It is reported in the press release of SPII. ByCell India for 74% belongs to the Swiss offshore ByCell Holding behind which as the company claims, there are certain "Russian investors". In 2005 ByCell got permission from SPII for implementation of investments at the rate to $100 million and submitted applications for obtaining universal telecommunication licenses in five Indian districts. In 2007, shortly before mass distribution of telecommunication licenses, ByCell made the decision to apply for the panindyisky license and submitted the new application to SPII – this time for $400 million.

However questions to the company arose at the Ministry of Internal Affairs of India which began the corresponding investigation. With respect thereto SPII several times transferred decision-making according to the new request of the company, the department of telecommunications of India (DTI), in turn postponed consideration of a question of issue of licenses to the company. However, in February, 2008 the Indian authorities gave to Russians "green light": SPII approved the request ByCell for implementation of investments, and DTI issued guaranty letters on obtaining licenses in five districts (Assam, Bihar, West Bengal, Orissa and the Northwest) which are initially requested by the company. After that the company paid the cost of licenses ($5 million) and entered required bank guarantees ($14 million) and also began search of employees and signed agreements with contractors on construction of networks. ByCell total investment to India was, according to the company, 1.2 billion rupees ($25 million).

However, licenses to Russians not were is issued in this connection ByCell could not start construction of networks. At the beginning of this year the company was forced to submit a claim to the Supreme Court of Delhi against SPII and DTI. The court obliged the authorities within a month repeatedly to consider the request of the Russian company, and in April SPII again issued ByCell permission to investments in the amount of 12.5 billion rupees (at a present rate – more than $500 million). But in May the Ministry of Internal Affairs of India performed with claims to the company again, the Indian newspaper Economic Times writes. The investigation made by department revealed that shareholders of the company are her heads – Maxim Naumchenko and Andrey Poluektov, at the same time the head structure of the company – ByCell Holdongs - could not provide documents, in particular, the balance list which would confirm its method to perform the stated investments.

In reply to ByCell took such unprecedented step as the offer to change structure of shareholders on condition of preserving of SPII of earlier issued permission to investments, writes the DNA edition. Nevertheless, council made decisions to withdraw all permissions from the company. Earlier the CEO of ByCell India Alexander Luzin warned that such solution will mean crash of the company. Andrey Poluektov confirmed to CNews that permissions were really withdrawn, but refused comments about further actions of the company. At the same time the representative of ByCell reminded that listenings in court of Delhi in the claim of the company continue.

The CEO of the analytical agency "Rustelekom" Yury Bryukvin considers that the Indian authorities can have the most different reasons for pressure upon the Russian company. "It can be both banal racketing from some officials, and suspicion that Russians play the game too close to the foul and created the company for the purpose of resale, - Bryukvin argues. - At the same time trumps now on the party of Hindus: because of numerous claims of India to Russia on workmanship of military orders (for example, recently Calculating chambers of India recognized a half of the rockets of the class "surface-to-air" delivered by Russia rejected) now the relations between the countries to put it mildly not the best therefore possibilities of the Russian investors to use an administrative resource are limited".

However, problems with an entry into the telecommunication market of India arise not only at Russians. At the recent meeting SPII also transferred consideration of the request of the Norwegian Telenor about increase in its share in Unitech Wireless from 49% to 74%. This operator last year obtained the pan-Indian telecommunication license, and Norwegians agreed about purchase of 67% of its stocks for $1.3 billion. However the authorities of India had concerns concerning the request Telenor as Norwegians already work in the neighboring Pakistan which disputes the rights of India to the State of Kashmir.

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Roughly took away telecom permissions in India from Russians