Bloomberg News

India Top Court Cancels 122 Mobile Phone Licenses Issued in 2008

February 02, 2012

Feb. 2 (Bloomberg) -- India’s Supreme Court canceled 122 mobile-phone permits awarded by former telecommunications minister Andimuthu Raja in a 2008 sale termed by the nation’s auditor as “arbitrary.”

The court ordered some of the 10 operators to pay as much as 50 million rupees ($1 million) as penalty, according to the ruling by judges G.S. Singhvi and A.K. Ganguly. The Supreme Court said the companies may continue with their operations for four months.

The court’s verdict was in response to petitions from non- government organizations and individuals, who have questioned the validity of the licenses after the Comptroller and Auditor General of India said in a report in 2010 that the sale of the airwaves lacked transparency and ineligible bidders bought them at “unbelievably low” prices. The corruption allegations have weakened Prime Minister Manmohan Singh’s government, stalling its legislative agenda for most of the last 14 months.

Raja, who has denied all wrongdoing, is in jail in New Delhi facing trial, while former officials in his ministry and a lawmaker got bail.

Unitech Ltd. plunged as much as 14.3 percent in Mumbai trading, while Reliance Communications Ltd. declined as much as 9.3 percent.

-- With assistance from Bibhudatta Pradhan in New Delhi. Editors: Subramaniam Sharma, Sam Nagarajan

To contact the reporter on this story: Ketaki Gokhale in Mumbai at kgokhale@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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