New Delhi, Feb 22 (IANS) Telecom service provider Idea Cellular’s stock fell 4.52 percent in intra-day trade Tuesday following reports that the company’s licenses in six circles could be cancelled as an enquiry by the Department of Telecom (DoT) had found that the company violated merger and acquisition norms.
The reports also said Idea could be fined Rs.300 crore because of irregularities in its acquisition of Spice telecom in October 2008.
In a recommendation to the DoT, the additional solicitor general has said Idea and Spice violated the merger guidelines which prohibit new entrants from selling stake within three years of obtaining licenses.
In early trade at the Bombay Stock Exchange the Idea Cellular stock fell 7.14 percent to an intra-day low of Rs.58.50. It was ruling at Rs.60.15 in the afternoon.
According to the recommendation of the additional solicitor general, Idea could also be fined Rs.300 crore for not meeting rollout obligations as Spice had already obtained the license in January 2008.
While Idea Cellular was issued two licenses, Spice Cellular got four licenses on Jan 25, 2008. Hence the two could not have merged until January 2011. Idea bought a majority stake in Spice Communications in 2008.
The law officer has also said the company violated laws by holding more than 10 percent stake in two mobile companies operating in the same regions.
Denying the charge Idea Cellular said the merger took place with the permission of the DoT, adding it is the company which is the aggrieved party and driven to the wall by the inert approach of the DoT.
“The court merger was consummated with the full knowledge and support of the DoT, over a year ago,” the company said in a statement.
Accusing DoT of not paying attention to the issue, the company said: “Over the last 30 months, Idea has pursued the matter with 20 letters and a half dozen meetings, to which a deaf ear has been turned.”