Bloomberg News

Five Indian Company Executives Given Bail in Phone-Permit Case

November 30, 2011

Nov. 23 (Bloomberg) -- 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.

Ending seven months in prison, a two-judge top court 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.’s Vinod Goenka and Unitech Ltd.’s Sanjay Chandra, saying there was little chance the men would be able to interfere with evidence important to their trials.

Today’s was the Supreme Court’s first verdict 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, federal lawmaker Kanimozhi and three companies.

Shares in DB Realty jumped by the daily limit of 20 percent in Mumbai trading after news of the verdict emerged. Reliance Communications rose as much as 6.9 percent and was up 4 percent at 11:10 a.m. local time. Unitech shares gained 6.7 percent to 23.75 rupees after rising as much as 10.6 percent. The benchmark BSE India Sensitive Index was down 1.6 percent.

The telecoms scandal has weakened Prime Minister Manmohan Singh’s government, lowered investors’ confidence, stalled parliament, paralyzed legislation and led to street protests. The government, under pressure from activists and opposition parties, aims to pass legislation setting up a tough anti-graft agency in the session that started yesterday.

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 at about $31 billion, while the Central Bureau of Investigation said it may have cost the government 220 billion rupees ($4.5 billion).

The trial court 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.

--Editors: Mark Williams, Arijit Ghosh

To contact the reporter on this story: Pratap Patnaik in New Delhi at ppatnaik2@bloomberg.net

To contact the editor responsible for this story: Hari Govind at hgovind@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus