Idea to challenge Rs 600 crore govt penalty notice

Tags: Idea, Companies
Idea Cellular Ltd, India's third-biggest cellular carrier by revenue and users, said on Tuesday it had received a government notice asking for Rs 600 crore in penalties for allegedly violating rules when it acquired a smaller rival five years ago.

Idea is preparing to challenge the government order, it said in a filing to the stock exchanges.

In 2008, Idea agreed to buy smaller rival Spice Communications in a three-way deal that also gave Malaysia's Axiata about a fifth of Idea. Idea currently runs Spice operations in two zones as part its own operations.

The telecommunications ministry has said Idea violated rules as it held permits in zones where Spice had operations. Indian rules then prohibited companies to own 10% or more in a competing carrier in the same zone.

Idea has denied any wrongdoing and has said the merger was approved by courts. Idea shares largely ignored the news and were trading about 0.3% lower by 10:35 am.

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