Bharti Shares Plunge After Chairman Ordered to Appear in CourtPratap Patnaik and Kartikay Mehrotra
Bharti Airtel Ltd., India’s biggest wireless company, plunged the most in seven months after a court ordered billionaire Chairman Sunil Mittal to appear in court in a case regarding the purchase of airwaves.
Shares fell 4.6 percent to 293.40 rupees in Mumbai, the most since Aug. 9. Bharti has been charged with purchasing second generation spectrum in excess of the government’s 4.4 megahertz limit, said Judge O. P. Saini at the court in New Delhi, where the company is based.
“We will fight this charge sheet,” Bharti said in an e-mailed statement. The mobile-phone carrier said the charge was “an attempt to tarnish” its reputation.
If the charges against Bharti are proven, the government may take away the excess airwaves, according to Harit Shah, analyst at Mumbai-based Nirmal Bang Institutional Equities. In a separate case, the company, which has seen its debt increase more than sixfold since 2010, has also been asked to pay a fine of 3.5 billion rupees ($64 million) for violating its third-generation phone services license agreement. Bharti has challenged the order in court.
“This will be a disaster, not just for Bharti, but for the industry and the country,” said Shah, who recommends investors sell the stock. “Bharti has a lot of expenses coming their way and being stripped of this excess spectrum and stuck with a fine won’t help their case.”