PartyGaming in Indian police raid

PartyGaming's call centre in Hyderabad was raided by police six months ago on suspicion the company was breaking Indian laws on gambling.

PartyGaming's call centre in Hyderabad was raided by police six months ago on suspicion the company was breaking Indian laws on gambling.

Officials from Hyderabad Police's Cyber Crime Department and from the Government's Income Tax Department investigated the poker group's Indian customer services centre, according to the company's flotation prospectus published this week. Gambling is illegal in India, and there were fears the company's 950-strong call centre was a host for illicit activities.

The company has disclosed the raid as it gears up to join Britain's blue-chip companies on the FTSE 100 index. The float will land its four founders, two of whom are Indian, £1bn between them, but the company is already beset by controversy. The US also believes online gambling is criminal and prosecutions against the directors are a possibility.

PartyGaming co-operated with the investigation and no action was taken by Indian authorities after the raid. The company believes it is not breaking Indian law.

The company's £4.7bn float was handed a significant boost yesterday, however, when Morgan Stanley, the US investment bank, told investors to back the company.

Analysts at the bank believe the upside outweighs the risk. "Our overriding thought is that PartyGaming will be a winner in what we believe will remain a significant, viable and profitable industry," analysts said.