Indian authorities are investigating top mobile phone carrier Bharti Airtel under its money laundering and foreign exchange rules in what a company source said was a probe related to the grant of airwaves a decade ago. Bharti shares fell as much as 5.1 percent during trade on Tuesday after junior finance minister S.S. Palanimanickam told parliament that the Directorate of Enforcement was investigating the company. The shares pared most losses to close 1.2 percent down.
Indian mobile market leaders Bharti and Vodafone's local unit are not involved in a massive scandal over alleged below-market-price sale of lucrative telecoms licences in 2008 that has rocked the once-booming sector. They are, however, being investigated over airwave grants during 2001 and 2002.
Bharti, controlled by India's fifth-richest man Sunil Mittal, said in a statement it was co-operating with investigators. It did not give the reason for the investigation, but a company source told Reuters that it was related to the probe over airwave grants. "Bharti Airtel maintains the highest standards of corporate governance and regulatory compliance ... We have already provided all relevant details asked for by the relevant authorities in this matter and will be happy to cooperate further," Bharti said in the statement.
The minister, who was replying to questions from a lawmaker through a written statement, declined to give further details. Bharti, nearly one-third owned by Southeast Asia's top phone company, SingTel, operates in 20 countries across Asia and Africa and is the world's fifth-biggest mobile phone carrier by subscribers. India is its biggest market.
Shares in Bharti, valued at more than $21 billion, lost 3.6 rupees to close at 304.15 rupees, after hitting an intra-day low of 292.05 rupees. A series of corruption scandals during Prime Minister Manmohan Singh's second term have rocked the government and businesses, sparking street protests by anti-graft activists and spurring a flurry of investigations of companies.
The scandal over the 2008 licence grant has ensnared prominent politicians and high-profile corporate executives. Police have charged a total 19 people and six companies in the scandal, which a state auditor has estimated has cost the exchequer as much as $34 billion in lost revenue. Last November, police conducted searches at offices of Bharti and Vodafone India seeking details of airwaves allocated to them in 2001 and 2002 by a government then led by the Bharatiya Janata Party (BJP), now in opposition. The investigation is continuing and police are yet to file any formal charge against the companies. Both Bharti and Vodafone India have denied any wrongdoing.
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