KUALA LUMPUR (Feb 11): Axiata Group Bhd said its subsidiaries Celcom Axiata Bhd (Celcom) and Celcom Mobile Sdn Bhd (Celcom Mobile) have responded to the initial arbitration notice regarding its proposed 35% stake sale in Tune Talk Sdn Bhd.
Axiata and its two units had been brought to court by a group of three Tune Talk shareholders who collectively hold 30.02% stake, to block Axiata from selling its entire 35% stake in the mobile virtual network operator held through Celcom Mobile.
Celcom Mobile is a unit of Celcom, which is in turn a unit of Axiata. As part of the merger proposal between Celcom and Digi.Com Bhd, the 35% stake owned by Celcom Mobile in Tune Talk is not listed as an excluded asset.
In a bourse filing, Axiata said it is aware that the disputing Tune Talk shareholders — Padda Gurtaj Singh, East Pacific Capital Ltd and Tune Strategic Investments Ltd — have commenced arbitration proceedings against Celcom and Celcom Mobile with regard to the dispute.
“Axiata is aware that Celcom and Celcom Mobile have responded to the initial arbitration notice and the matter is now pending next steps before the Asian International Arbitration Centre (AIAC),” Axiata said.
“In respect of the injunction filed to the High Court of Malaya by the claimants as referred to in the previous announcements, Axiata wishes to inform that no interim relief and/or injunction has been ordered by the High Court against Axiata, Celcom and/or Celcom Mobile.
“Axiata will make further announcements as and when there are material developments on the court matter,” it said.
Pending the arbitration, the three disputing shareholders have filed an injunction in September 2021 to block Celcom from including the 35% stake in Tune Talk for the merger with Digi.Com.
If the sale goes on as part of the merger, it will allow Digi.Com to gain an indirect shareholding in Tune Talk, the parties argued.
Digi.Com was named as a competitor in Tune Talk’s 2008 shareholders’ agreement, of which the claimants and Celcom Mobile are parties to.
Axiata, in response, had filed an application to strike out the suit. The case was heard before judicial commissioner Ong Chee Kwan, and will continue on March 11.
Shares of Axiata traded up five sen or 1.29% at RM3.94 at the time of writing, giving the telecommunications group a market capitalisation of RM36.15 billion.