New Delhi, May 15: India's No. 1 mobile operator Bharti Airtel is under Enforcement Directorate investigation over charges of money laundering and violation of foreign exchange rules, junior finance minister S.S. Palanimanickam told Parliament today.
"The Directorate of Enforcement is investigating cases under the provisions of Prevention of Money Laundering Act, 2002, and Foreign Exchange Management Act, 1999, involving Bharti Airtel Ltd," Palanimanickam said in a written reply.
He, however, did not provide any additional information, saying, "It may not be in the interest of the ongoing investigations to provide any further details."
In a statement, Sunil Mittal-promoted Bharti Airtel said it had provided the details sought by the authorities and would co-operate further. The company said it maintained the highest standards of corporate governance and regulatory compliance.
The Bharti scrip fell as much as 4.7 per cent soon after the news but later recovered to settle at Rs 303.50, down 1.28 per cent from the previous close.
Last month, the Enforcement Directorate summoned the top brass of Bharti Airtel and Vodafone in connection with alleged irregularities in the grant of additional 2G spectrum during 2001-03 when Pramod Mahajan was the telecom minister.
The CBI is also probing the spectrum allocation case. In November, the CBI raided the offices of Airtel and Vodafone after it had filed an FIR for alleged irregularities nearly a decade ago. The CBI had alleged the exchequer suffered a loss of Rs 508 crore after Mahajan gave additional airwaves to these companies in 2002.
In August last year, minister of state for finance Namo Narain Meena had said, "The Enforcement Directorate has initiated enquiries about suspected contraventions of the provisions of the Fema by Bharti Airtel." It is not known whether the ED investigations are related.
Meena had also said the Securities and Exchange Board of India and the Central Board of Direct Taxes (CBDT) had received complaints against the firm.
Sebi received complaints accusing Bharti Airtel of increasing the promoter group's shareholding by flouting norms.
It is alleged that the shareholding was raised to 67.15 per cent on September 30, 2008 from 60.91 per cent on June 30, 2007 without making an open offer. This is a violation of Regulation 11 of the Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, the complaint said. The CBDT has also received a reference containing allegations of improper accounting treatment of licence fee and spectrum charges by the company, the minister said.
Russian telecom operator Sistema ' which holds a 56.68 per cent stake in its Indian joint venture Sistema Shyam Teleservices Ltd and operates under the MTS brand ' today said it would be forced to quit India if Trai's high base price for spectrum auction was accepted by the government.