Malaysian telco loses share dispute
Malaysia's largest telecommunications company Telekom Malaysia said it has been ordered to pay Germany's Deutsche Telekom nearly $US200 million ($A262 million) after losing a dispute over a share sale agreement.
Telekom Malaysia said its mobile arm Celcom was found liable by an arbitration panel in Switzerland for infringing an agreement signed with Deutsche Telekom AG's unit, DeTeAsia, on April 4, 2002,
Telekom Malaysia, in a statement released late on Thursday, said the tribunal ruled that Celcom was liable to pay DeTeAsia $US177.2 million in principal, plus $US16.2 million in interest as a result.
It added that Celcom was also liable to pay legal and arbitration costs.
"Celcom is seeking legal advice in respect of options available regarding the decision of the Arbitral Tribunal," Telekom Malaysia said.
Deutsche Telekom in 2003 sought international arbitration to resolve a dispute over the sale of its shares in Celcom to Telekom Malaysia.
The German company held an eight per cent stake in Celcom and said it had an agreement with the Malaysian mobile provider under which its DeTeAsia unit could sell back the shares at seven ringgit ($A2.43) each.
However, in a subsequent deal, Telekom Malaysia bought the rest of Celcom at 2.75 ringgit a share over Deutsche Telekom protests that it should get seven ringgit.
Celcom is a major profit contributor to Telekom Malaysia, whose shares have dropped more than 10 per cent this year.