Court summons Bharti Airtel Chairman in mobile airwaves case

Wednesday, 20 March 2013 01:16 -     - {{hitsCtrl.values.hits}}

Reuters: India’s biggest telecommunication carrier Bharti Airtel’s Chairman Sunil Mittal, was ordered on Tuesday to appear before a court in a case over alleged corruption in allocating mobile phone bandwidth more than a decade ago.

The court also summoned the former head of Vodafone Group Indian unit Asim Ghosh, and Ravi Ruia, one of the founders of diversified conglomerate Essar Group, in the same case.

Mittal, Ghosh and Ruia were summoned because “They represent the directing mind and will of each company”, Judge O.P. Saini said in his order. The men will stand in court on 11 April.

“The acts of the companies are to be attributed and imputed to them. Consequently, I find enough material on record to proceed against them,” Saini said.

In 2002, Bharti Airtel and Vodafone’s India unit were charged over alleged irregularities in allotting mobile spectrum. The charge sheet did not name any individual executives. Bharti and Vodafone India have previously denied any wrongdoing.

Essar Group is the parent company of Essar Energy and Essar Steel India. There was no immediate comment from Bharti Airtel, Vodafone India and Essar Group about the court order.

Shares in Bharti fell as much as 7.6% after the judge read out the summons, before cutting some losses to close 4.6% lower in Mumbai trading.

Vodafone started its business in India in 2007 by acquiring a majority stake in Hutchison Whampoa’s mobile operations, a unit that was set up in partnership with Essar Group. Essar Group maintained a stake in Vodafone India until 2011.

The investigation follows a separate scandal over band with allocations in 2008 in which the state auditor said the ruling Congress-Party led Government may have lost up to US$ 32.5 billion due to below-market price sales of radio spectrum. The Police have charged 19 people and three companies in the case, and they are on trial.

The Supreme Court had ordered police to investigate any possible irregularities in the allocation of mobile airwaves from 2001 to 2007. Police have estimated a potential loss of US$ 156 million in Government revenue due to the alleged irregularities in 2002.