Indian telecoms executives Sunil Mittal and Ravi Ruia will not have to appear before a special court set up to investigate irregularities in the allocation of spectrum more than a decade ago, following a ruling by India’s top court that will see the hearing deferred by at least six weeks, according to a report from Dow Jones Newswires.
Mittal, the chairman of Bharti Airtel (New Delhi, India), and Ruia, the vice chairman of Essar Group, had been summoned to appear in the special court this week to face questions about their involvement in the possible misallocation of 2G spectrum in 2002.
Both men, however, had submitted pleas arguing that the special court had no authority to summon them because they had not been named in the original charges, which were filed by India’s Central Bureau of Investigation in December last year.
The operators have been accused of conspiring with former regulatory and government figures to acquire spectrum at a substantial discount, leading to a loss in government takings of about $155 million.
According to the Dow Jones story, Altamas Kabir, the Chief Justice of India, has said neither Mittal nor Ruia will have to appear before the special court and that India’s Supreme Court will hear the various arguments after a six-week period in which the CBI must file responses to the executives’ pleas and the executives will have chance to file counter pleas.
The case affects Vodafone (Newbury, UK), which acquired Indian operator Hutchison Essar – a joint venture between Hutchison Whampoa (Hong Kong) and the Essar Group (Mumbai, India) – in 2007.
The companies could be fined millions of dollars if found guilty of misconduct, while executives face lengthy prison sentences.
Although Vodafone did not enter India’s telecoms market until several years after the alleged irregularities took place, Indian authorities have shown a willingness to penalize investors in similar circumstances.
Some of the operators that owned spectrum sold in 2008, and had licenses rescinded because of misconduct during that process, entered the market by acquiring winning bidders after the auction had concluded.