HEALTHSOUTH SCANDAL

WHO ARE HEALTH SOUTH ?

HealthSouth specialise in providing long-term rehabilitative treatment and care to
patients suffering from serious debilitative conditions, such as strokes and genetic illnesses,
caused by the breakdown of brain tissue, producing the muscle tremors characteristic of the
disorder. The mission goal of the HealthSouth Corporation is to improve quality of life and
maximise the independence of their patients.

In 2003, the company was discovered to be fraudulently manipulating accounts, in an

attempt to keep the earnings of the company at the predictions of Wall Street. As a result of the
criminal nature of the company's actions the reputation of HealthSouth has been permanently
tarnished, resulting in a substantial reduction in earnings and the closure of many rehabilitation
centres.

Shore, D. (2014). The Trust Prescription for Healthcare.

WHAT HAPPENED?

A downturn was happened in the market in 1998, largely influenced by a Medicare

crackdown on fraud. However, HealthSouth insisted that it would not impact on them. Since
selling large numbers of their own shares, senior staffs believed that their profits would not be
met. The main trouble happened since 1999. In order to meet shareholders’ expectation,
Richard Scrushy, the founder of HealthSouth Corporation required to make false account.

As a result, the earning numbers were systematically overstated by at least $1.4 billion
which is over 10% of the company’s total assets. Then, the scandal at HealthSouth started to
become evident in mid 2002. In May 2002, Richard Scrushy sold more than $75 million worth of
HealthSouth stock and sold another $25 million back to the Company. By the third quarter of
2002, assets of Healthsouth were overstated by at least $800 million. As a result, the
government began to pay attention to the huge difference between the number of actual and
reported profit of Healthsouth. At this time, the scandal was not a secret any more. After that,
share prices of Healthsouth became extremely unstable. 

In 2003, Healthsouth was in trouble and faced bankruptcy. ‘In the middle of March 2003,
the FBI and the SEC raided HealthSouth's headquarters. The next day civil actions were
commenced against Scrushy and HealthSouth. The company was delisted from the stock
exchange. Shares, which had exceeded US $30 early in 1998 now, sold over the counter for 14
cents.’ (Michael Wynne, 2009)
 ‘In June 2005, Scrushy was acquitted on all 36 of the accounting fraud counts against
him, most notably one count in violation of the Sarbanes-Oxley Act. But in June 2006, he was
convicted on bribery charges, having stood accused of arranging $500,000 in campaign
donations in exchange for a seat on a state hospital regulatory board. While this executive
unfortunately appears to have gotten away with the accounting scandal, he was ultimately
found guilty of another.’ (Bhamwiki, 2012)

HOW THEY DID IT?

When the Financial accounts started to get weaker at HealthSouth, Scrushy instructed
accountants and senior officers to falsify the company earnings to meet the investors’
expectations. The earnings of the company shows a true reflection of how the company is
performing. If Scrushy had allowed the earnings to drop, the market price of the shares would
reduce, which would ultimately reduce the value of the company. As a result of this, the CEO
forced underlings to make up financial transactions in the books, telling them to inflate the
earnings to the expected predictions from Wall Street.

HealthSouth were able to increase its earnings, by overstating assets and understating
liabilities which kept the books balanced. They managed to fraudulently overstate the assets
within the company by over 800 million dollars. This was done by increasing the value of
property, plant and equipment under a certain threshold, so that it wouldn't cause any
suspicion to the auditors checking the accounts. Over the years they managed to increase the
value of the assets within the company to more than 50% of its actual worth. Following on, they
also managed to overstate the cash amount by 300 million dollars causing an impact the
financial statement.

The senior accountants created meetings called “Family meetings” within the company.
These meetings would involve members discussing how the accounting staff would falsify the
financial books, in a way which they were able to cover up the fraud, so the auditors checking
the financial statements would not notice anything wrong with the accounts. The main way in
which they managed to fraud the company was by making financial transactions between the
values of 500 to 5,000 pounds because auditors were not able to check every transaction within
the company as this would become too time consuming. This enabled the company to make
countless fraud transactions without them being detected by the auditors. Resulting in a
substantial amount being fraudulently transacted over the years, which has a massive effect on
the earnings of the company.

On top of all of this, the company went to such extremes that they produced false
documents to present to the auditing teams to try and prove that the fake transactions were
legitimate.
HOW THEY WERE CAUGHT?

HealthSouth were caught for fiddling their accounts, in order to overstate profits that
they never had. This was an attempt by their CEO who at the time was Richard Scrushy, to
ideally prevent HealthSouth from reporting a loss. As a result the company was able to
artificially overstate profits, revenue and keep share prices high. However, the FBI eventually
caught them in 2003, when one of the HealthSouth employees decided he could no longer
continue lying. That individual was Weston Smith. When he informed the FBI, they raided
HealthSouth’s offices and uncovered the massive scandal at hand.

A case could be argued whether they would have ever been caught in 2003 alone or
whether they would have continued committing fraud in the future, as it was an own former
employee that blew the whistle. Question needed to be answered, mainly how they were able
to continue this façade for so long. The auditors were either missing information, being lazy and
not doing their jobs to the standards required or plainly just turning a blind eye. One thing is for
certain mistakes were made by all those who were involved. If it had not been for Weston
Smith, HealthSouth could have continued with their fraud for who knows how long.

Scrushy decided to ignore the new act (Sarbanes-Oxley Act of 2002) in favour of keeping
accounts overstated. Richard Scrushy who was still CEO decided to sell $100 million worth of
shares in the business just prior to this legislation becoming law. Shareholders should have been
asking question and the authorities investigating, the finances of HealthSouth. In truth it was
this law that led Smith to blow the whistle at HealthSouth and Richard Scrushy.

Before 2003 when the FBI was told, another former employee, this time Michael Vines
tried and failed to blow the whistle at HealthSouth. Michael tried to warn everyone roughly 4
and half years prior to 2003. His attempts at the time failed, as then nobody believed his
accusations, he was seen of as a disgruntled former employee. This may also have been
attributed to the fact that Ernst & Young, who were at the time responsible for auditing
HealthSouth, said they found no wrong doing when they investigated. When questioned at this
they replied that when they received the e-mail, it did tell them that fictitious events were
being carried out but not enough detail was given for where they could be found only a couple
of accounts were listed. As a result Ernst & Young decided to ignore this and carried on.

PENALTIES

Scrushy faced two different trials for this scandal the first trial was in Birmingham,
Alabama and the second in Montgomery, Alabama. The first trial was in Birmingham where
Scrushy faced 36 charges of fraud, false corporate reportings, and making false statements yet
was found not guilty for all of these allegations (Morse, D. 2005). However in his second trial, he
was found guilty of bribing the governor of Alabama and mail fraud, which led to a 7 year prison
sentence in 2006. Mail fraud is an act where a perpetrator intentionally deprive another of
property or honest services via mail or wire communication, this crime specifically requires the
intent to defraud. In addition to this he was ordered by a Delaware judge to pay back $25
million in loans that he took from the company in 1999.

In 2009 Scrushy was ordered to pay $2.9billion (Pavlo, W. 2012), which left a once very
wealthy powerful man in a tough financial position and one that was unable to pay for his own
prison accommodation. However in 2012 his original sentence of 82 months was reduced to 70
months, he had already served 55 months by this time. Furthermore judge Mark Fuller also
made Scrushy pay a monthly cost of incarceration ($1,952) (Pavlo, W. 2012). 

On July 25, 2012 Scrushy was released from federal custody and did not serve his full
term but the penalties had not ended yet for him as he was ordered to do 500 hours of
community service. 

Weston smith was sentenced to 27 months however only served 14 of those months in a
federal prison then was released and had to serve a further four months in a halfway house.

Aaron Beam, was sentenced to three months in a trial that took place in Birmingham,
Alabama. In addition to this he was also fined $10,000 and ordered to pay $275,000. This was a
good deal for Beam as he should have been facing 30 years in jail and also fine of up to
$1,000,000 (Carrns, A. 2005), however the court was lenient towards him as he provided
information about the accounting fraud occurring at HealthSouth.

Michael Vines, did not have any legal against him as although he was part of the
company, he did not want to participate with the illegal activity occurring. Trying to bring the
worlds attention to the corruption in Healthsouth worked in Vines favour as the law was also
very lenient and overlooked his involvement if any. 

WHERE ARE THEY NOW?

Name: Richard Scrushy

Role: Chief  Executive Officer

Recent publisher of  “When Building a Billion Dollar Company: Here are a few things to think
about” as former HealthSouth CEO, Scrushy currently offers his services as a public speaker
providing presentations to a variety of institutes including universities discussing his
entrepreneurial experiences, issues that may arise in large firms and the implications of fraud.

Name: Weston Smith 

Role: Chief Financial Officer

Not dissimilar to Scrushy, Weston Smith also offers his services as a public speaker. Choosing to
focus upon the importance of ethical conduct within the workplace with specific focus on how
fraud occurs within a company. In addition to this, Smith also engages in corporate fraud
research.

Name: Aaron Beam 

Role: Chief Financial Officer

As the founder and first CFO  of  HealthSouth, like his peers Beam also  offers talks and
publications upon the importance of ethics within a workplace as he educates others on
ethical practice  drawing upon his experience within HealthSouth Corporation.

CONCLUSION

The downfall of Healthsouth under the reign of Richard Scrushy can be pin pointed down to 3
main reasons, greed, lack of morals throughout the company and failure of internal controls.
Richard Scrushy was obsessed with increasing the status of Healthsouth and increasing his own
personal profit, this drove him to do whatever he could to preserve the companies reputation
and keep the shareholders happy. This led him to pushing and manipulating his own staff
members into committing crimes for the 'benefit of everyone involved in the company', this
showed a lack of morals by the all those who were involved. 

It is clear that although there may have be internal controls within HealthSouth to prevent
fraud,  however these were not followed by those at the top, who thought they were above the
law. Precautions were not put in place to prevent such illegal actions which eventually led to
the downfall of Richard M. Scrushy and the reputation of the empire that he controlled,
HealthSouth.

HARSHAD MEHTA SCAM

 Georg Hegel, a German philosopher once said: “We learn from history what we do not
learn from history.” This quote is very apt, especially in the light of the Rs 13,000-crore Nirav
Modi-Punjab National Bank scam. Why? Because back when India had just opened up its
markets to the world in 1991, a stock broker named Harshad Mehta had pulled off an even
more audacious scam by exploiting the loopholes in the Indian banking system.

Adjusted for inflation today, Harshad Mehta fraudulently laundered over Rs 24,000
crore in the stock market over a three-year period.

What happened to those accused in the scam, including Harshad Mehta himself? Was
the money ever recovered? Will the fraud cases that are still being contested in court today
ever come to a meaningful conclusion?

WHO WAS HARSHAD MEHTA?

Harshad Mehta was a well-known stock broker, alleged to have manipulated the stock
market in 1992 by drawing funds from banks fraudulently with worthless bank receipts and
subsequently using this liquidity to buy huge amounts of shares at a premium across many
industry verticals.

Born as Harshad Shantilal Mehta in 1954 to a lower middle-class Gujarati family, Mehta
spent his early childhood in Kandivali, Mumbai, whilst his father ran a small business However,
the family had to shift to Raipur in Chhattisgarh for medical reasons.

Mehta completed his schooling in Raipur but never showed much promise. He moved
back to Mumbai alone after completing school, completed is B.Com from Lajpat Rai College and
took up odd jobs-from selling hosiery to sorting diamonds-for the next eight years.

His journey to becoming the 'Big Bull' Mehta began when he landed a job as a sales
person at The New India Assurance Company. It is here that he got interested in the stock
market, following which he quit and joined a brokerage firm in 1981. By the year 1990, Mehta
had risen from rags to riches and had become a prominent name in the Indian stock market.

WHAT WAS SECURITIES SCAM?

The securities scam of 1991-92 refers to a diversion of bank funds worth Rs 3,500 crore
to a group of stockbrokers, led by Harshad Mehta. These funds were then put into the stock
market selectively, causing it to surge to over 4,500 points. It was first exposed by veteran
journalist Sucheta Dalal in April 1992.

Mehta's favourite stocks included Associated Cement Company (ACC) , Apollo Tyres,
Reliance, Hero Honda, Tata Iron and Steel Co (TISCO), BPL, Sterlite, and Videocon, to name a
few. The ACC, India's foremost cement firm, was Mehta's favourite. He pumped money into its
shares so aggressively that its stocks rose from Rs 200 a share to Rs 9,000 a share in three
years... a 4,400 percent rise!

He had the touch of Midas: everything he touched became gold and thousands of
gullible investors followed his lead. He was called 'the Amitabh Bachchan of the stock market'
and 'the Big Bull.' His 12,000 sq ft sea-facing Worli penthouse, complete with a mini golf course
and swimming pool and his fleet of two dozen luxury cars, marked his steep and sudden rise to
riches and celebrity-status. Not a subtle or modest man, he even paid the Income Tax
Department an advance tax of Rs 26 crore just weeks before the scandal broke.

Mehta's illicit methods were exposed on 23 April 1992, when Sucheta Dalal wrote an
article in The Times of India detailing the loopholes in the banking system that had been
exploited by the stock broker. She got the tip-off after she saw him pull up at the State Bank of
India offices in a brand new Toyota Lexus, which had just been released internationally and
costed more than Rs 40 lakh at the time.

WHAT HAPPENED HARSHAD MEHTA?

Harshad Mehta was arrested by the Central Bureau of Investigation (CB1) in November
1992, along with his brothers Ashwin and Sudhir, who masterminded and executed this scam
together.

Alongside, the Reserve Bank of India appointed a joint parliamentary committee (JPC),
also known as the Janakiraman Committee, to provide a comprehensive picture of the extent
and mechanics of the fraud. The government, through an ordinance, set up a Special Court for
the trial of offences in the case and also created an Office of the Custodian, occupied by a
bureaucrat and appointed by the court, to manage the assets of the scam-accused during the
trial and for the disbursement of dues to banks and the Income Tax Department.

Mehta and his brothers were released on bail after three months in custody, weeks after
which he publicly claimed, along with his lawyer Ram Jethmalani, that he had paid Rs1 crore to
then Prime Minister PV Narasimha Rao as donation to the Congress to get him "off the hook."
He even displayed the suitcase in which he allegedly carried the cash. Rao denied it, and later, a
CBI probe also found no concrete evidence of this bribery claim.

Once out on bail, several stock market investors gave Mehta a hero's welcome. He made
several comebacks after that as a "new age" stock market guru, and by 1997, he had his own
website and newspaper column where he would advise people about what stock to buy and
sell. Rigging was alleged here as well in return for favour and money from the top brass of
Sterlite, Videocon and some other firms.

Despite the promptness shown by the CBI and the JPC in uncovering this fraud, it took a
while to put together criminal evidence against Mehta. It was only in October 1997 that the
Special Court set up to hear the bevy of cases related to the securities scam approved 34 of the
72 charges brought forward by the CBI against him.
 In September 1999, the Bombay High Court awarded five years rigorous Imprisonment
to Mehta and three others in the Rs 380.97 million Maruti Udyog Ltd fraud case (MUL), one of
the many individual cases within the larger securities scam.

By the time he died, he had been convicted in only one (the MUL fraud) case, his appeal
against which was dismissed by the Supreme Court in 2003. The rest of the criminal cases were
abated due to his passing away but the civil suits for the recovery of crores of money remained.

WHAT WAS THE EXTENT OF THE SCAM & WHAT IS ITS STATUS TODAY?
Following the scam, the Reserve Bank of India had appointed the Janakiraman
Committee to probe it. In its first report, the committee quantified the scam amount at Rs 4,300
crore involving units of the Unit Trust of India (UTI). Adjusted for inflation, this amount stands at
over Rs 24,000 crore today.

Of these liabilities, Mehta's family has to pay Rs 4,662 crore to various banks (mainly
interest charged over the years) and Rs 11,174 crore to the I-T Department.

The assets worth Rs 1,723 crore belong to 27 associates and family members of Mehta,
who were finally clubbed as an entity and held liable along with Mehta by the special court. It
was challenged by Mehta's family but the Supreme Court upheld the decision of the custodian
in May 2017,

The Mehta family-led by Ashwin Mehta, who has been representing the family in court
for decades now is fighting this recovery amount at various levels, right from reducing their net
liabilities to safeguarding family assets from recovery and liquidation.

In the Supreme Court, Ashwin Mehta had argued that the claims made by the I-T
Department in its assessment reports were way too high and that the custodian had
undervalued the Mehtas' assets purely taking into account the revenues of Harshad Mehta (and
his affiliate companies) and not his many incomes, such as TDS refunds. He also claimed that
the custodian was yet to recover the family's shares in companies like the ACC and Apollo Tyres
worth Rs 300 crore and Rs 233 crore, respectively. He insisted that the family had more assets
than liabilities and not the other way around.

What is to be kept in mind is that the total amount may never be recovered as Harshad
Mehta also held shares worth over Rs 453 crore across 13 companies in benami accounts (value
as on June 1995, as mentioned in a court submission) . When the scam was exposed, the
benami account holders sold their shares, leaving the custodian very litle to connect those
accounts with Harshad Mehta.

Will the Mehta family and associates be able to pay off their liabilities only half of which
has been recovered 25 years after the scam was exposed? Ashwin Mehta thinks so. In a detailed
report in The Economics Times dated July 2016, he was quoted as saying to lwyers of the
opposite camp: "Please do not worry... I'll return all your money. Even after paying you all, I'll
have a little over Rs 1,000 Crore to take home.”

5. WHATEVER HAPPENED TO THE ALL THE CASES?

All criminal cases against Harshad Mehta got disposed off a few years ago, but there are
several civil cases awaiting final closure.

Today, these cases are delayed to the point of irrelevance due to various reasons,
among which are India's notoriously slow judiciary, money forever lost through benami and
unregistered shares, and frequent litigation by the Mehta family.

The kingpin is dead and so are several more of the accused over the decades. The
money is yet to be completely recovered. About 70 percent of all cases in the special court are
still suits related to the Securities Scam, even 26 years later. Documents and evidences have
become outdated. Witnesses and the country have moved on to the Nirav Modis of today,
proving yet again that justice delayed is justice denied.

AIRTEL TELENOR MERGER

About AIRTEL
 Bharti Airtel Ltd was incorporated in the year 1995 with the name Bharti Tele-Ventures
Ltd. The company was promoted by Bharti Telecom Ltd, a company incorporated under the
laws of India. The name of the company was changed from Bharti Tele-Ventures to Bharti Airtel
Ltd with effect from April 24, 2006 in order to reflect their brand essence, objective and the
nature of their business activities.

Bharti Airtel Limited is a leading global telecommunications company with operations in

17 countries across Asia and Africa. Headquartered in New Delhi, India, Bharti Airtel ranks
amongst the top 3 mobile service providers globally in terms of subscribers.

The company offers an integrated suite of telecom solutions to its enterprise customers,
in addition to providing long distance connectivity both nationally and internationally. The
Company also offers Digital TV and IPTV Services.

The company operates in four strategic business units, namely Mobile, Telemedia,
Enterprise and Digital TV. The mobile business offers services in India, Sri Lanka and Bangladesh.

The Telemedia business provides broadband, IPTV and telephone services in 95 Indian
cities. The Digital TV business provides Direct-to-Home TV services across India. The Enterprise
business provides end-to-end telecom solutions to corporate customers and national and
international long distance services to telcos.

About TELENOR
Telenor Group is a leading telecommunications company across the Nordics and Asia
with 182 million customers and annual sales of around USD 13 billion (2018).

It hold #1 or #2 positions in most of its markets. Connectivity has been Telenor’s domain
for more than 160 years, and our purpose is to connect our customers to what matters most.
Telenor is listed at Oslo Stock Exchange.

Telenor Group has mobile operations in the Nordics, including Norway, Sweden,
Denmark, Finland and in Asia, including Pakistan, Bangladesh, Thailand, Malaysia, Myanmar.

They have a leading Nordic position in mobile, broadband and TV services, as well as
substantial activities in subsidiaries and joint venture operations, including mobile financial
services and online classifieds in the Asia region. Worldwide, Telenor Group and our operations’
teams are more than 20,000 people strong. Telenor’s purpose is to “Connecting you to what
matters most, Empowering societies.”

On 23rd February 2017, Telenor India was acquired by Bharti Airtel.

Advantage of AIRTEL
The takeover would fortify Bharti against competition like Jio and also the proposed
Vodafone-Idea merger.
 As part of the agreement, Bharti will acquire Telenor India's running operations in seven
circles-Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. These
circles represent a high population concentration and, therefore, offer a high potential for
growth.

The acquisition will cross the 50-per cent revenue market share threshold in the Bihar,
which would require trimming 9.2 per cent of Telenor's revenue.

Some analysts said higher customer base through acquisition is not expected to auto
matically translate into increase in revenues for Bharti as most of the Telenor users are low
income customers.

Tale of TELENOR
Telenor had signed a JV with Unitech in 2009 and it invested Rs 6,135 crore through
equity and a little over Rs. 8,000 crore in debt

"From Telenor's perspective it must be disappointing to exit the market because they
have significant presence in South Asia, in Pakistan and Bangla desh,"

According to sources, there will be downsizing of Telenor India's 4,000 employees,

including 700 permanent ones. Bharti has around 19,000 employees, and there could be
overlaps in roles.

In calendar year 2016, Telenor India's total revenues grew 79 per cent to Norwegian
Krone 6 billion (Rs4,700 crore). Its earnings before interest, tax, depreciation and amortisation
stood at Norwegian Krone 434 million (Rs340 crore) against a loss of Norwegian Krone 47
million in 2015. However, Telenor took an impairment loss and write-downs in its India
operation of Norwegian Krone 7 A billion (Rs5,800 crore) in 2016.

Bharti's decision to buy Telenor India sends stock soaring 10%

The stock has seen strong movements, posting a rise of over 18 percent in the past one
year. It touched its 52-week high of Rs 390.55 on Thursday. Shares of Bharti Airtel rose over 10
percent intraday Thursday after the company announced that it is acquiring Telenor India.
 The company entered into a definitive agreement with Telenor South Asia Investments
to acquire Telenor (India) Communications, subject to approvals from the regulator, it told the
exchanges on Thursday.

The cost of this acquisition is still under finalisation. Sources tell CNBC-TV18 that the
deal’s value could be pegged roughly at Rs 6,800-7,000 crore, which includes Telenor India’s
debt of Rs 1,500 crore.

As part of the deal, Airtel will buy Telenor India's running operations in seven circles—
Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East), UP (West) and Assam. These circles,
Airtel says, represents a high population concentration and a high potential for growth. The firm
will also get additional 43.4 MHz spectrum in 1800-MHz band from Telenor India.

"The acquisition of additional spectrum through this transaction has further enhanced
our already solid spectrum portfolio. The proposed transaction will also create substantial long
term value for our shareholders given the significant synergies," said Gopal Vittal, Managing
Director and CEO (India and South Asia), Bharti Airtel, in a statement.

Meanwhile, the telecom major on Wednesday announced strategic stake purchase

through its subsidiary Bharti Airtel Services in fintech startup Seynse Technologies, which runs a
digital lending platform.

The stock has seen strong movements, posting a rise of over 18 percent in the past one
year. At 09:20 hrs Bharti Airtel was quoting at Rs 390.55, up Rs 29.40, or 8.14 percent on the
BSE. It touched a 52-week high of Rs 390.55.

Analysing the deal, Deutsche Bank feels that the key value for Bharti from this deal
would be from two high-population arkets of Uttar Pradesh (East) and Uttar Pradesh (West).
Telenor holds 7 MHz spectrum in these markets comparted to the minimal holding of Bharti. So,
this acquisition, it feels, will help Bharti roll out 4G in 1800 MHz band in these two markets.

On revenue share, the brokerage states that Telenor India has 4-10 percent share in six
of the operating markets. Hence, this acquisition will help Bharti significantly strengthen its
market position in all markets. However, in Bihar, the merger could lead to an estimated
revenue share of 53-54 percent for Bharti, which is above the cap of 50 percent.

It pegs the volume of Telenor India’s spectrum around Rs 4,000 crore

Bharti Airtel-Telenor deal: 5 reasons why it had to happen

Aggressive entry of Reliance NSE 1.42 % Jio in the Indian telecom sector has triggered major
consolidation. Bharti Airtel's decision to buy Telenor's India operations is the third consolidation
this year after Vodafone-Idea and Reliance Communications-Aircel-Tata teleservices talks for a
merger. Bharti Airtel needs to counter Jio's freebies and the prospect of the biggest telecom
company Vodafone-Idea merger will create.

Below are five takeaways from Bharti Airtel's move to consolidate its position in the telecom
battlefield:

1. The spectrum gain

The defining feature of Bharti Airtel's acquisition is spectrum. Spectrum matters more than
anything else for Bharti Airtel in this deal. Telenor will give Bharti Airtel an additional 43.4 MHz
spectrum in the 1800 MHz band. This will boost Aitel's already robust spectrum kitty.

2. The 4G edge

The spectrum gain from Telenor acquistion will add critical value to the company when fast data
has come to rule the Indian telecom market. Bharti Airtel is rolling out its 4G services in 1,800
MHz band and 2,100 Mhz band. Telenor's 43.4 MHz spectrum in the 1800 MHz band will
certainly power Bharti Airtel's 4G services.

3. The subscriber base

The Telenor acquisition will give Bharti Airtel 52.5 million subscribers. This will be a significant
addition to Bharti Airtel's 269 million subscriber base in the country, especially when
Vodafone’s 205 million subscribers and Idea's 190 million add up to a big challenge to the
company, not to forget Reliance Jio making biggest subscriber gains in recent months.

4. Most-valued footprint

Telenor's operations will empower Bharti Airtel in India's most densely populated regions.
Telenor has operations in seven circles: Andhra Pradesh, Bihar, Maharashtra, Gujarat, UP (East),
UP (West) and Assam. All these regions are now crucial for telecom companies as they are not
only densely populated but also hold vast potential as mobile services and infrastructure spread
in the under-served interiors of India at a rapid pace.

5. Beating the rivals

Early this month, there were reports about Telenor looking to merge its India operations with
Reliance Communications. Bharti Airtel's swift swoop on Telenor has given it an edge over its
rivals as Telenor would have been bought by Bharti Airtel's rivals sooner or later due to growing
consolidation after Reliance Jio’s entry.

Over 700 Telenor Employees Facing Lay-off after Its Merger with Airtel

The merger of Norwegian telecom company Telenor's Indian arm with Bharti Airtel Ltd
has left half of the employees of Telenor India in the dark. Though Airtel is said to have
absorbed over 700 employees of the company, the equal number of staff members are still
facing layoffs.

The merger of Norwegian telecom company Telenor's Indian arm with Bharti Airtel Ltd
has left half of the employees of Telenor India in the dark. Though Airtel is said to have
absorbed over 700 employees of the company, the equal number of staff members are still
facing layoffs. In terms of customer base - with over 330 million subscribers across India -
Airtel's merger with Telenor India makes it twice the size of its 4G data service rival Reliance Jio.
As part of the restructuring, Telenor India employees have received emails from Bharti Airtel,
asking them to visit their HR department to discuss "way ahead and next step".

With over 1,400 employees working with Telenor India, the company has a significant
presence across seven states, including Andhra Pradesh, Telangana, Bihar, Maharashtra,
Gujarat, Uttar Pradesh, and Assam. As a fallout of the current merger, many employees would
be left jobless. Airtel has clarified its position on the matter, saying "not all people from Telenor
India will find meaningful roles within Airtel", reported PTI.

The news agency also quoted a Telenor employee, who met the company HR after
receiving the email, saying: "They told me that post-merger, they have no place for my position.
They offered me five months salary and asked my resignation letter. I have not decided what to
do." It also quoted a source saying the future of around 700 employees is still undecided with
the merged entity.

Meanwhile, Airtel is reportedly offering five-month salary plus medical insurance and
free call facility to all those who are being shown the door post the integration.

Bharti Airtel had announced the acquisition of Telenor India on May 14. Both the
companies started merger talks in February 2017. As part of the deal, all Telenor customers will
now be a part of Bharti Airtel with the same SIM, same number and same plan. Airtel will add
43.4 MHz spectrum (5 MHz to 7.2 MHz in each of the seven circles) to its portfolio, bolstering its
network capacity.

The entry of Mukesh Ambani-led Reliance Jio has created tough competition for
companies like Airtel. Ever since the Jio launch in 2016, several companies have either faced
closure or have merged to stay relevant in the hugely competitive telecom sector. Now Airtel is
planning to step up investments and aggressively expand its high-speed data network across the
country as part of Project Leap.

BIBLIOGRAPHY
https://sites.google.com/site/healthsouthscandalinfos6/who-are-healthsouth
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securities-scam

https://www.capitalmarket.com/Company-Information/Corporate-actions/Bonus-Issues/Bharti-Airtel-
Ltd/15542

https://www.moneycontrol.com/news/business/stocks/bhartis-decision-to-buy-telenor-india-sends-
stock-soaring-10-1032880.html

https://www.slideshare.net/AnmolChaturvedi5/airtel-telenor-merger

https://economictimes.indiatimes.com/news/company/corporate-trends/bharti-airtel-telenor-deal-5-
reasons-why-it-had-to-happen/articleshow/57307318.cms

https://www.businesstoday.in/sectors/telecom/700-telenor-employees-facing-layoff-after-its-merger-
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