Reliance Communications Falls to Record Amid Wireless Probe
Reliance Communications Ltd., the worst-performing stock in India’s benchmark Sensex Index this year, tumbled to a record low in Mumbai trading amid a probe by investigators into the 2008 auction of phone licenses.
India’s second-largest mobile-phone operator dropped 5.3 percent to 87.45 rupees at the 3:30 p.m. close in Mumbai. Gaurav Wahi, a spokesman for Reliance Communications, didn’t answer two calls made to his mobile phone.
Reliance Communications has lost 40 percent of its market value this year as the Central Bureau of Investigation extended a probe into the allocation of airwaves and questioned chief executives of phone companies, including Reliance Communications’ Chairman Anil Ambani. The stock fell 14.3 percent on Feb. 9, prompting Ambani to blame brokers for spreading “baseless, sensational” charges.
“The market mood is very nervous,” said Jagannadham Thunguntla, chief strategist at SMC Capital Ltd., which manages $100 million in stocks. “Market participants are feeling very restless when it comes to any sort of uncertainty.”
The CBI arrested former telecommunications minister Andimuthu Raja and at least two other officials on Feb. 2 after the nation’s chief auditor said in November the sale of permits at below-market prices may have potentially cost the treasury $31 billion.
Investigators have said in court that Raja conspired to benefit companies including Swan Telecom Ltd., now known as Etisalat DB Telecom Pvt., and Unitech Ltd. by violating guidelines in the license sale. Last week, Raja was sent to jail for two weeks following his interrogation.
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