Court summons Bharti head in mobile airwaves case

NEW DELHI Tue Mar 19, 2013 8:42pm IST

Bharti Enterprises chairman Sunil Mittal speaks during a news conference in Mumbai December 13, 2006. REUTERS/Punit Paranjpe/Files

Bharti Enterprises chairman Sunil Mittal speaks during a news conference in Mumbai December 13, 2006.

Credit: Reuters/Punit Paranjpe/Files

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NEW DELHI (Reuters) - Sunil Mittal, chairman of India's top mobile phone operator, Bharti Airtel Ltd (BRTI.NS), was ordered on Tuesday to appear in court in a case over alleged corruption in allocating mobile phone bandwidth more than a decade ago.

The court also summoned Asim Ghosh, former head of Vodafone Group Plc's (VOD.L) Indian unit, and Ravi Ruia, one of the founders of diversified conglomerate Essar Group, in the same case.

Police in December charged Bharti Airtel, and two companies that are now part of Vodafone's Indian unit, over alleged irregularities in mobile spectrum allotment in 2002. The charge sheet did not name any individual executives. Bharti and Vodafone India have previously denied any wrongdoing.

Bharti said in a statement on Tuesday it was "saddened" by the summons to the company and Mittal. It said the airwaves were allocated to the company in accordance with rules, and said it would fight the charges.

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

Essar Group, whose group companies include Essar Energy Plc (ESSR.L), called the court's order on Ravi Ruia "shocking and surprising". The group is exploring legal options to challenge the court's order, it said in a statement.

Vodafone India did not immediately comment.

Vodafone started its business in India in 2007 by acquiring a majority stake in Hutchison Whampoa Ltd's (0013.HK) mobile operations, 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 represent the directing mind and will of each company", Judge O.P. Saini said in his order.

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

"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 his order, a copy of which was seen by Reuters.

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

The investigation follows a separate case over bandwidth allocations in 2008 in which the state auditor said the ruling Congress Party-led government may have lost up to $32.5 billion due to radio spectrum sales at below-market prices.

Police have charged 19 people and three companies in that 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 $156 million in government revenue due to the alleged irregularities in 2002.

(Editing by Stephen Nisbet)

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