* Company Law Board says Uninor cannot proceed with auction
* Telenor to appeal ruling in higher courts
* Minority partner Unitech sought to stop sale
(Recasts lead, adds details from order, Uninor comment)
NEW DELHI, Aug 9 (Reuters) - The minority partner of
Telenor's Indian unit blocked a bid by the Norwegian
mobile phone carrier to buy out assets and rebuild the joint
venture which is being stripped of its operating licence.
The Company Law Board, a quasi-judicial body that rules on
company disputes, on Thursday upheld a challenge by Indian
property company Unitech Ltd against an auction of
assets in Uninor, the mobile phone joint venture of which it
owns one third.
Uninor, 67 percent-owned by Telenor, said it would appeal
Telenor and Unitech have fallen out after the Supreme Court
ordered the government to withdraw the licence of Uninor and
other mobile operators following a scandal-tainted sale in
Telenor has blamed Unitech for losing the licence, accusing
it of "fraud and misrepresentation."
Uninor had invited potential bidders to express interest by
Aug. 8 and said Telenor was willing to bid in the auction.
The asset auction was seen as a move by Telenor to buy out
Unitech and rebuild the business.
The Company Law Board (CLB) last week asked Uninor not to
proceed with the auction until a further order, which Uninor had
challenged at the Delhi High Court.
The Delhi High Court had allowed it to receive interests
from potential bidders, pending a final order from the Company
"Since the CLB order has now been pronounced, we are able to
comprehensively move our arguments towards Uninor's asset
auctions to the higher courts," Uninor said in a statement.
Telenor and Unitech did not immediately comment after the
Company Law Board order.
Uninor is among eight mobile carriers in India that are set
to lose a total of 122 regional operating permits.
Telenor has said it will either leave India or buy out
Unitech and take the business into a new entity with a new
partner to seek fresh operating permits.
Unitech has contested Telenor's moves and has said it has
veto rights over any asset transfer.
(Reporting by Suchitra Mohanty; Writing by Devidutta Tripathy;
Editing by David Cowell)