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India court summons Bharti boss in mobile spectrum case

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(Globalpost/GlobalPost)

An Indian court on Tuesday ordered Sunil Bharti Mittal, the billionaire head of India's biggest mobile firm Bharti Airtel, to appear in court on corruption allegations over the 2002 allotment of telecom airwaves.

The summons stems from a decision by India's Supreme Court ordering the federal Central Bureau of Investigation (CBI) to investigate possible wrongdoing in allocating mobile airwaves from 2001 to 2007.

Mittal, chairman of Bharti Airtel, and Asim Ghosh and Ravi Ruia, two former executives of Indian mobile company Hutchison-Essar -- now owned by Britain's Vodafone -- were ordered to appear in court on April 11.

The men were "in control of affairs of the respective companies", said special CBI Judge O.P. Saini, who issued the summonses dating from events alleged to have taken place under the previous Bharatiya Janata Party national government.

"They represent the directing mind and will of each company," Saini said, adding he was "satisfied there is enough incriminating material on record to proceed against the accused persons".

Mittal is one of India's most respected businessmen. Until now, he has not been personally dragged into the second-generation (2G) spectrum allocation controversies that have shaken the country in recent years.

Shares of Bharti Airtel, already under pressure from fierce price competition in the mobile sector, slid nearly eight percent after the judge announced the summons but recovered some losses to close down five percent at 293.40 rupees.

Bharti Airtel slammed the accusations as an "attempt to tarnish its high reputation".

Police allege former telecom secretary Shyamal Ghosh conspired with now-deceased telecom minister Pramod Mahajan to allot extra spectrum in 2002 at below-market prices to the companies, depriving the treasury of 8.46 billion rupees ($156 million) in lost revenues.

Bharti Airtel and Vodafone's India unit were charged in December with alleged irregularities in the 2002 airwaves allotment.

All have denied any wrongdoing and Bharti has said the extra spectrum allocation was to "improve the quality of service".

This case is separate from a massive 2008 spectrum allocation scandal in which India's Congress government allegedly under-priced spectrum and favoured certain firms, costing the treasury up to 176.64 billion rupees ($32 billion).

Some 19 people, including former telecom minister A. Raja, and three companies have been charged in the 2008 case -- one of a string of scandals that has buffeted the government of Prime Minister Manmohan Singh.

Bharti said it was "saddened" at the developments and noted police had found no evidence of conspiracy "against any individual whatsoever".

"We will fight this charge sheet against Bharti Airtel Ltd and Sunil Bharti Mittal," Bharti said in a statement, voicing confidence "our position will be vindicated".

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http://www.globalpost.com/dispatch/news/afp/130319/india-court-summons-bharti-boss-mobile-spectrum-case-0