Indian authorities are probing the country's top mobile phone company, Bharti Airtel, over allegations of money laundering, a minister said Tuesday, sending the company's shares plunging five percent.
The country's directorate general of economic enforcement is carrying out the investigation, junior finance minister S.S. Palanimanickam told parliament.
Palanimanickam said the enforcement directorate was investigating accusations of money laundering and violations of foreign exchange regulations. He gave no further details.
A source close to the company told AFP that the investigation may involve the allocation of mobile airwaves to Bharti early in the last decade by the previous Bharatiya Janata Party (BJP) government.
A Bharti spokesman denied any wrongdoing by the company.
"Bharti Airtel maintains the highest standards of corporate governance and regulatory compliance and has always complied with all norms," the spokesman said, who declined to be named.
"We have provided all relevant details asked for by the authorities in this matter and will be happy to cooperate further, should the need arise," the spokesman added, declining to comment further.
The investigation is part of a sprawling investigation into the awarding of spectrum in 2008 that has engulfed the current Congress-led government and threatens to taint the previous BJP government.
Bharti and Vodafone are not caught up in an alleged multi-billion-dollar corruption scandal involving the 2008 allocation of mobile spectrum.
But late last year, police searched the offices of Bharti and the Indian unit of Britain's Vodafone Group over alleged irregularities in the distribution of mobile spectrum between 2001 and 2003 when the BJP was in power.
Vodafone last November said the company had acted in "complete compliance" with rules. Vodafone bought a 67-per cent stake in Hong Kong-based Hutchison Whampoa's Indian mobile unit in 2007.
The minister made no mention of Vodafone in his written statement to parliament on Tuesday.
Bharti shares tumbled five percent following the minister's announcement but then retraced most of their losses to close down 1.28 percent at 303.50 rupees.