New Delhi, February 13 (Agencies): While continuing with face-to-face custodial questioning of the former Telecom Minister, A. Raja, and DB Realty managing director Shahid Balwa on Saturday as part of its ongoing probe into 2G spectrum scam, the Central Bureau of Investigation has started looking into business links between Mr. Balwa’s Swan Telecom Ltd and the Anil Dhirubhai Ambani group (ADAG), which launched Reliance Telecom Ltd. (RTL). In a new twist to the ongoing probe into allegations of corruption and wrongdoings in allocating 2G spectrum and issuing Unified Access Service (UAS) licences, the CBI is also verifying contents of a letter written to it in December last year by Mr. Balwa in which he had reportedly admitted to getting investments from RTL.
In his letter, CBI sources said, Mr. Balwa admitted that ADAG helped him set up business to apply for 2G spectrum licences. DB Realty’s chief also said the ADAG had brought preferential shares in his company to give him initial capital. In fact, the November 2010 report of the Comptroller and Auditor-General of India (CAG) on the issue of licences and allocation of 2G spectrum mentions that “Swan Telecom Private Limited, while applying for the UAS licences in 13 service areas, was acting as a front company on behalf of RTL and their application was in effect against the intent and spirit of the UAS licensing guidelines.” It said the total equity/stakes of RTL in Swan Telecom was of Rs.1002.79 crore as against an equity holding of Rs.98.22 crore by the majority share-holder Tiger Traders Private Limited. The report pointed out that Swan Telecom happened to be a newly incorporated company with no fixed assets and it “raises doubts about the intention of the RTL and the control it would exercise in a new company incorporated barely few months ago.”
‘Officials cooperating’
The ADAG also confirmed that some group officials were examined by the CBI in connection with telecom-related matters that dated from 2001 to 2009. In a statement issued on Saturday, it said the officials had been cooperating with the CBI in the investigations. “As part of its ongoing investigations pursuant to the Hon’ble Supreme Court’s orders, the CBI is reportedly examining a large number of telecom companies and their officials over the past several weeks, in relation to various matters relating to the years 2001 to 2008. As part of this process, the CBI has also examined a few officials of the Reliance ADA Group, and we are fully co-operating with the authorities in this regard,” the ADAG said in the statement.
The CAG report also concluded that 85 licences were issued to the companies, which suppressed facts, disclosed incomplete information and submitted fictitious documents to the Department of Telecom (DoT) and thus used fraudulent means for getting the UAS licences and thereby access to spectrum. “Owners of these licences, obtained at unbelievably low price, have in turn sold significant stakes in their companies to the Indian/foreign companies at high premium within a short period of time. The premium earned by these new entrants to the telecom sector was nothing but the true value of the spectrum, which should have normally accrued to the public exchequer,” the CAG report said.
Net to widen
The CBI is also ascertaining if the DB Realty Managing Director invested in a number of front companies on behalf of Mr. Raja and if some foreign channels were used in transferring illegal funds. The CBI sources said the agency was likely to further widen its net of investigations and a team was likely to reach Chennai soon for questioning some more persons suspected of having links with the former Minister and could help in deciphering the money trail that allegedly flowed out of the 2G spectrum scam.
In his letter, CBI sources said, Mr. Balwa admitted that ADAG helped him set up business to apply for 2G spectrum licences. DB Realty’s chief also said the ADAG had brought preferential shares in his company to give him initial capital. In fact, the November 2010 report of the Comptroller and Auditor-General of India (CAG) on the issue of licences and allocation of 2G spectrum mentions that “Swan Telecom Private Limited, while applying for the UAS licences in 13 service areas, was acting as a front company on behalf of RTL and their application was in effect against the intent and spirit of the UAS licensing guidelines.” It said the total equity/stakes of RTL in Swan Telecom was of Rs.1002.79 crore as against an equity holding of Rs.98.22 crore by the majority share-holder Tiger Traders Private Limited. The report pointed out that Swan Telecom happened to be a newly incorporated company with no fixed assets and it “raises doubts about the intention of the RTL and the control it would exercise in a new company incorporated barely few months ago.”
‘Officials cooperating’
The ADAG also confirmed that some group officials were examined by the CBI in connection with telecom-related matters that dated from 2001 to 2009. In a statement issued on Saturday, it said the officials had been cooperating with the CBI in the investigations. “As part of its ongoing investigations pursuant to the Hon’ble Supreme Court’s orders, the CBI is reportedly examining a large number of telecom companies and their officials over the past several weeks, in relation to various matters relating to the years 2001 to 2008. As part of this process, the CBI has also examined a few officials of the Reliance ADA Group, and we are fully co-operating with the authorities in this regard,” the ADAG said in the statement.
The CAG report also concluded that 85 licences were issued to the companies, which suppressed facts, disclosed incomplete information and submitted fictitious documents to the Department of Telecom (DoT) and thus used fraudulent means for getting the UAS licences and thereby access to spectrum. “Owners of these licences, obtained at unbelievably low price, have in turn sold significant stakes in their companies to the Indian/foreign companies at high premium within a short period of time. The premium earned by these new entrants to the telecom sector was nothing but the true value of the spectrum, which should have normally accrued to the public exchequer,” the CAG report said.
Net to widen
The CBI is also ascertaining if the DB Realty Managing Director invested in a number of front companies on behalf of Mr. Raja and if some foreign channels were used in transferring illegal funds. The CBI sources said the agency was likely to further widen its net of investigations and a team was likely to reach Chennai soon for questioning some more persons suspected of having links with the former Minister and could help in deciphering the money trail that allegedly flowed out of the 2G spectrum scam.
