India Probe Agency: Seeking Clarifications From StanChart On Maxis-Aircel Deal

Indian investigators are seeking clarifications from Standard Chartered PLC (STAN.LN) as part of a probe into allegations that a former telecom minister forced the founders of mobile-phone operator Aircel Ltd. to sell out to Malaysia's Maxis Communications Bhd in 2006.

Standard Chartered had advised Maxis in the deal under which the Malaysian company bought a 74% stake in Aircel. India's Sindya Securities & Investments Pvt. Ltd., part of Apollo Hospitals Group, owns the rest of Aircel.

A spokesman for the Central Bureau of Investigation told Dow Jones Newswires Wednesday that some executives of the bank were called to the agency's office for clarifications. "The CBI is actively pursuing the case...We are seeking documents from bankers [on the deal]," he said.

A spokesman for Standard Chartered said in an emailed statement, "The CBI has asked for some information related to the Aircel-Maxis transaction, and we are fully cooperating with them."

The CBI's move to seek details of the deal is part of a wider investigation into all allocations of radio bandwidth since 2001. This specific probe is into allegations that former Telecommunications Minister Dayanidhi Maran had a role in forcing the owners of Aircel to sell out to the Malaysian company. Maran, who was telecom minister between February 2004 and May 2007, resigned last week as federal textiles minister after the CBI told the Supreme Court about Maran's possible role in the Maxis-Aircel deal in 2006.

Aircel at the time was owned by C. Sivasankaran, who couldn't be reached for comment.

The CBI told the Supreme Court that Aircel's applications to the Department of Telecommunications to expand its mobile telephone services were on hold for about two years. But the licenses were granted within six months of the company being sold to Maxis and the Indian investor.

According to local media reports, Maran allegedly favored Aircel in exchange for Maxis investing in Sun Direct TV Pvt. Ltd., a Maran family-owned company.

Maran has denied any wrongdoing. Maxis, Aircel and Sun Direct TV weren't immediately reachable for comment.

The CBI, along with other government bodies, is also probing allegations of favoritism and manipulation to favour some telecom companies in their applications for radio airwaves in 2008. This allegedly caused the government a potential revenue loss of INR300 billion ($6.7 billion), the CBI says. The government's top auditor earlier estimated the loss to be $40 billion.

-By R. Jai Krishna and Romit Guha, Dow Jones Newswires; +91-9967586928; romit.guha@dowjones.com

Maxis Bhd (PK) (USOTC:MAXSF)
Historical Stock Chart
From Dec 2024 to Jan 2025