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Pin to quick picksVodafone Share News (VOD)

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UPDATE 2-India court summons Bharti head in mobile airwaves case

Tue, 19th Mar 2013 15:10

* Court also summons ex-Vodafone Indian unit head, EssarGroup founder

* Bharti says will fight charges, Essar exploring legaloptions

* Bharti shares slump after court order (Adds Bharti, Essar statements)

By Suchitra Mohanty and Devidutta Tripathy

NEW DELHI, March 19 (Reuters) - Sunil Mittal, chairman ofIndia's top mobile phone operator, Bharti Airtel Ltd,was ordered on Tuesday to appear in court in a case over allegedcorruption in allocating mobile phone bandwidth more than adecade ago.

The court also summoned Asim Ghosh, former head of VodafoneGroup Plc's Indian unit, and Ravi Ruia, one of thefounders of diversified conglomerate Essar Group, in the samecase.

Indian police in December charged Bharti Airtel, and twocompanies that are now part of Vodafone's Indian unit, overalleged irregularities in mobile spectrum allotment in 2002. Thecharge sheet did not name any individual executives. Bharti andVodafone India have previously denied any wrongdoing.

Bharti said in a statement on Tuesday it was "saddened" bythe summons to the company and Mittal. It said the airwaves wereallocated to the company in accordance with rules, and said itwould fight the charges.

Shares in Bharti closed 4.6 percent lower, having fallen asmuch as 7.6 percent after the judge read out the summons.

Essar Group, whose group companies include Essar Energy Plc, called the court's order on Ravi Ruia "shocking andsurprising". The group is exploring legal options to challengethe court's order, it said in a statement.

Vodafone India did not immediately comment.

Vodafone started its business in India in 2007 by acquiringa majority stake in Hutchison Whampoa Ltd's mobileoperations, a business set up in partnership with Essar Group.Essar Group maintained a stake in Vodafone India until 2011.

Mittal, Ghosh and Ruia were summoned because "they representthe directing mind and will of each company", Judge O.P. Sainisaid in his order.

The men were ordered to appear in court on April 11.

"The acts of the companies are to be attributed and imputedto them. Consequently, I find enough material on record toproceed against them," Saini said in his order, a copy of whichwas seen by Reuters.

Mittal is India's eighth richest man with a net worth of$6.8 billion, according to Forbes rankings, while Ravi Ruiaalong with his brother Shashi Ruia ranks fifth with $8.5billion.

The investigation follows a separate case over bandwidthallocations in 2008 in which the state auditor said the rulingCongress Party-led government may have lost up to $32.5 billiondue to radio spectrum sales at below-market prices.

Police have charged 19 people and three companies in thatcase, and they are on trial.

The Supreme Court had ordered police to investigate anypossible irregularities in the allocation of mobile airwavesfrom 2001 to 2007. Police have estimated a potential loss of$156 million in government revenue due to the allegedirregularities in 2002.($1 = 54.2050 Indian rupees) (Editing by Stephen Nisbet)

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