UAE-based Emirates Telecommunications Corporation has field a lawsuit against the promoters of Swan Telecom (Etisalat DB) on Tuesday alleging fraud and misrepresentation in Indian operations.

Etisalat said in a statement that, “The Emirates Telecommunications Corporation-Etisalat has issued proceedings in the Indian courts against Mr. Balwa, Mr. Goenka and Majestic Infracon Pvt Ltd for fraud and misrepresentation.”

Etisalat also said that it was induced to invest in the company without proper disclosure of the matters that are now being investigates by CBI as part of its investigations in the 2G spectrum sale scam. Etisalat pointed out that the events occurred a year before Etisalat's investment.

The company also said that it is facing huge looses due to its investment despite the fact that it was not involved in the 2G licence application or award process. It said that Mr. Balwa, Mr. Goenka and Majestic Infracon were responsible for Swan at that time.

“Given the seriousness of the allegations, and in the light of the Order on Charge and Supreme Court decision, Etisalat has taken this action to protect its interests and those of its shareholders,” it added

Etisalat had invested about $900 million in 2008 for acquiring 45 per cent stake in Swan Telecom, which was later renamed as Etisalat DB (EDB).