Bharti Airtel shares fall after CBI search offices
Shares in Bharti Airtel, India's top mobile phone carrier, fell as much as 3.6 per cent on Monday after the Central Bureau of Investigation (CBI) searched its offices and those of Vodafone's Indian unit as part of an investigation into alleged irregularities in the allocation of the nation's airwaves.
Bharti shares pared losses to trade 1.04 per cent lower at 12:14 pm (0644 GMT) in a Mumbai market down 1.2 per cent.
The CBI has registered a case against the companies, two former telecoms ministry officials and others, it said.
The case relates to alleged irregularities in allotting mobile spectrum during the previous government led by the Bharatiya Janata Party (BJP), which is now in opposition.
Alleged 'undue favour' shown to companies had cost the government about 5.08 billion rupees ($98 million) over 2001-2007, the CBI said on its website.
The CBI said the former telecoms ministry officials with approval of the then-telecoms minister took an alleged 'hurried decision' on Jan. 31, 2002, to grant additional spectrum beyond 6.2 megahertz to the companies in violation of the report of a technical committee.
Pramod Mahajan, the then-telecoms minister, has been excluded from the case since he died in 2006.
"The market is not shocked by the CBI enquiry as it was expected since media reports were already suggesting that the agency could widen the scope for enquiry into telecom firms," said R.K. Gupta, managing director at Taurus Asset Management in New Delhi.
The Supreme Court, which is monitoring the probe into a 2007-2008 telecoms scandal that rocked the ruling Congress Party-led government, had asked the CBI to investigate any possible irregularities in the grant of licences from 2001 to 2007.
The Comptroller and Auditor General of India (CAG) has estimated a potential revenue loss of up to $39 billion to the government due to below-market sales of licences in 2007-08.
A trial recently began in the case, which involves a former telecoms minister, a lawmaker and several other government and company officials.
Bharti Airtel said on Saturday all spectrum given to it had been as per the government policy, while Vodafone said its documents were in complete compliance with the governing laws.
The new case could give the Congress party ammunition to fight back against BJP's attacks against the government.
Shouting matches and walkouts have shut down parliament on a near daily basis for much of the year. Parliament reconvenes on Tuesday.
The BJP has said the searches were carried out to deflect scrutiny away from the government's own corruption scandals.
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