Five Indian company executives charged with offenses linked to a 2008 sale of licenses to run mobile-phone services will be freed from jail after the Supreme Court granted them bail. Shares of their companies jumped.
A two-judge panel of G.S. Singhvi and H.L. Dattu today gave bail to Reliance ADA Group executives Gautam Doshi, Hari Nair and Surendra Pipara, DB Realty Ltd. (DBRL)’s Vinod Goenka and Unitech Ltd. (UT)’s Sanjay Chandra ending their seven-month incarceration. The court said there was little chance the men would be able to interfere with evidence for their trials.
Today’s was the Supreme Court’s first order on bail pleas by any of the 14 people jailed in the case. A special court in New Delhi framed charges last month against those accused, which include the five executives, former telecommunications minister Andimuthu Raja, lawmaker Kanimozhi and three companies.
DB Realty jumped by the daily limit of 20 percent in Mumbai trading after news of the order emerged. Reliance Communications (RCOM) rose as much as 6.9 percent and was up 0.6 percent at 12:24 p.m. local time. Unitech shares gained 4.5 percent to 23.25 rupees after rising as much as 10.6 percent. The benchmark BSE India Sensitive Index was down 3.3 percent.
The telecoms scandal has weakened Prime Minister Manmohan Singh’s government, lowered investor confidence in Asia’s third largest economy, paralyzed legislation and triggered street protests. Singh, under pressure from activists and opposition parties, aims to pass legislation setting up a tough anti-graft agency in the four-week session that started yesterday.
‘$31 Billion Loss’
Raja, government officials and the executives are on trial on charges they conspired to grant licenses to unqualified companies for personal benefit. All deny wrongdoing. India’s chief auditor put the potential loss to the exchequer from the first-come, first-served sale at about $31 billion, while the Central Bureau of Investigation said it may have cost the government 220 billion rupees ($4.5 billion). Opposition parties have criticized former Finance Minister Palaniappan Chidambaram and Singh for failing to hold an airwaves auction.
Trial judge O.P. Saini yesterday moved proceedings from a court in central Delhi to Tihar jail, the country’s highest security civilian prison for safety and convenience reasons.
The top court today asked the five businessmen to furnish a bail bond of 500,000 rupees and provide two sureties each for the same amount to the trial court. The executives had lodged appeals with the apex court after bail pleas were rejected by both the trial court and the Delhi High Court.
The decision to release the men will encourage others charged in the case to approach the trial court with fresh appeals, said M. Shivnarain, a lawyer not involved in the phone cases.
Kanimozhi, the daughter of Singh’s second-biggest coalition ally and seven others were denied bail Nov. 3 by the trial court, which cited in its ruling the “serious nature” of the charges against them which may have “grave implications for the economy of the country.” Raja has never sought bail.
Raja and Kanimozhi belong to the Dravida Munnetra Kazhagam party, which was routed in this year’s local elections in Tamil Nadu state in a backlash against perceived corruption.
The court may take as long as a year to complete the trial, which started on Nov. 12, as it will examine 80,000 pages of charges and evidence filed by the investigative agency. Prosecutors and defense counsel will question 150 witnesses.
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