Bharti Airtel, India’s biggest wireless company, plunged after a court ordered billionaire Chairman Sunil Mittal to appear in court in a case regarding the purchase of airwaves causing the government a loss of about 8.46 billion rupees ($156 million).

Bharti Shares Plunge After Chairman Ordered to Appear in Court

Bharti Airtel Ltd. (BHARTI), 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.” To contact the reporters on this story: Pratap Patnaik in New Delhi at ppatnaik2@bloomberg.net; Kartikay Mehrotra in New Delhi at kmehrotra2@bloomberg.net

NEW DELHI–An Indian court Tuesday asked Bharti Airtel Ltd. 532454.BY -4.74%Chairman Sunil Mittal and some former executives of a company now owned byVodafone Group VOD.LN +1.19% PLC to appear before it to face criminal charges in a case related to alleged irregularities in the allocation of telecom bandwidth in 2002.

India’s Central Bureau of Investigation had in December registered initial charges of criminal conspiracy and criminal misconduct against these companies. According to the federal agency, former Telecom Secretary Shyamal Ghosh conspired with then-Telecom Minister Pramod Mahajan to allot spectrum at lower prices to these companies, causing the government a loss of about 8.46 billion rupees ($156 million).

The court also summoned Asim Ghosh and Ravi Ruia, who were previously directors of Hutchison-Essar Ltd. The company, a joint venture between Hong Kong’s Hutchison Whampoa Ltd.0013.HK -0.50% and India’s Essar Group, was acquired in 2007 by Vodafone and later renamed Vodafone India Ltd.

Mr. Shyamal Ghosh also faces same charges. Mr. Mahajan died in 2006.

Judge O.P. Saini of the special court set up to consider cases over telecom spectrum allocations said he had examined the records and was “satisfied that there is enough incriminating material on record to proceed against the accused persons.”

The summoned executives were “alter egos” of their companies, the judge said. “In this situation, acts of the companies are to be attributed and imputed to them,” he added.

Bharti and Vodafone India could face penalties running into millions of dollars if the charges were proved. If any of the executives were found guilty, they could be jailed for up to seven years.

In a statement on behalf of the company and its chairman, Bharti said the company and its founders have always practised the “highest standards of corporate governance” and therefore it views the federal agency’s move to register charges “as an attempt to tarnish its high reputation.”

“We have full faith in the judicial process and are confident our position will be vindicated before the courts,” the statement added.

A statement from the Essar Group, on behalf of the company and Mr. Ruia, termed Tuesday’s order “shocking and surprising,” and said it was a minority partner in Hutchison-Essar when the allocations happened. Hutchison-Essar’s operations were “effectively in the hands of directors and employees nominated by the Hutchison group.”

“We are consulting our legal experts and exploring all legal options and will in due course take up appropriate legal proceedings to challenge this order,” Essar said.

Spokesmen for Vodafone India didn’t comment. Executives at Hutchison, Mr. Shyamal Ghosh and Mr. Asim Ghosh weren’t reachable for comments.

At the time of the alleged offences, the Bharatiya Janata Party was in power and Mr. Mahajan was one of its senior leaders. A Bharatiya Janata Party spokesman didn’t respond to telephone calls.

This case is separate from another telecom case in which former Telecom Minister Andimuthu Raja and 16 others are charged with irregularities in a 2008 allotment of telecom spectrum. All the accused have denied any wrongdoing in that case.

Mr. Saini, the judge of the special court, is hearing that case as well.