A civil war has broken out at under-fire Indian operator Etisalat DB between joint owners, Etisalat – the UAE-based operator group – and local partner, DB Group. The Economic Times reported yesterday that DB Group has taken legal action against Etisalat, accusing it of failing to perform its obligations in the joint venture. Etisalat hit back today in a statement that accused DB of “a cynical tactical move by parties charged with major corruption offences to shift attention away from their own situation and to disrupt the proper running of Etisalat DB to the detriment of its shareholders and customers.” Etisalat holds 44.73 percent in Etisalat DB, while 45.73 percent is owned by Majestic Infracon, a firm controlled by DB directors Shahid Usman Balwa and Vinod Goenka. Both executives are currently in jail after being accused of paying bribes to get spectrum and 2G licences in 2008, in the operator’s earlier incarnation as Swan Telecom.

In its statement, Etisalat noted that the “management of Etisalat DB has been made dramatically more difficult by Mr Balwa and Mr Goenka being in prison.” It also added that it is “investigating closely the circumstances in which Mr Balwa persuaded it to invest in Swan,” noting that this occurred after the controversial licences had been acquired. The spat comes just days after Etisalat DB was slapped with a US$1.6 billion fine for alleged breach of foreign ownership rules, concerning Etisalat’s stake in the operator.