CBI charges A. Raja, executives The Central Bureau of Investigation (CBI) has filed a charge sheet against nine people, including former telecom A. Raja, and three private companies in relation to the country’s 2008 2G scam.
A. Raja, former telecom…
CBI charges A. Raja, executives The Central Bureau of Investigation (CBI) has filed a charge sheet against nine people, including former telecom A. Raja, and three private companies in relation to the country’s 2008 2G scam.
A. Raja, former telecom secretary Siddhartha Behura, Raja’s private secretary R K Chandolia, as well as some executives of cellcos Swan Telecom (now known as Etisalat DB) and Unitech Wireless (Uninor) are reportedly facing charges of cheating along with other offences.
Norwegian telco Telenor, which owns a majority stake in the JV Uninor, said on its website: “When Telenor invested Rs61.2bn (US$1.3bn) for a 67.25% ownership in Unitech Wireless, it was in a company that already had a genuine license issued by the Indian government with all necessary approvals.
“During our own due-diligence process we found no reason to believe that the license was not awarded in accordance with the guidelines set by the authorities.
“The investment was made into the operating company and not to its promoters. This is the equity that has been used as working capital to fund the establishment of Uninor as a successful young mobile operator in India.” Number two cellco Reliance Communications and three of its executives have also been named in the charge sheet.
In a statement, Reliance wrote: “As legally advised, the persons so named [Gautam Doshi, Surendra Pipara, and Hari Nair] deny all charges, and will defend themselves in the appropriate legal proceedings. These preliminary charges have no impact on the business, operations, and/or licenses of Reliance Telecom, and, even more so, are not connected in any manner to any other of our listed group companies.” In recent months, several officials have been questioned, and arrested, following allegations of favouritism in the allocation of underpriced 2G spectrum to telecom operators that reportedly cost the government US$40bn.
Some executives have also been questioned over whether they benefited from the irregularities. In mid-February, the CBI quizzed the chairman of the Reliance ADAG conglomerate, Anil Ambani, to determine whether Swan acted as a ‘front company’ for RCom when applications for licences were made.
Etisalat DB’s vice chairman Shahid Balwa was also questioned and arrested in early February before resigning in March. Meanwhile, A. Raja stepped down in November and has remained in judicial custody since early February.
In a statement, the CBI stated that “under the Indian Law, the accused are presumed to be innocent till their guilt is finally established after a fair trial,” and that “further investigation in the case continues”. The CBI probe is expected to be completed by the end of May.
In the meantime, the CBI is conducting an investigation into the death of businessman Sadiq Batcha, an aide to A. Raja, who was questioned amid the 2G scam.
Batcha apparently committed suicide after leaving a note citing the pressure of the scandals, according to reports.
He was questioned in February by the CBI for his alleged involvement in the scandal.
Notices sent to Idea, Etisalat DB
The telecom ministry has reportedly sent notices to cellcos Idea Cellular and Etisalat DB asking them to justify why their licences should not be cancelled after they missed rollout obligations and/or were found ineligible to receive such licences.
Another 17 telcos will reportedly receive such notices before a decision on licence cancellation is made sometime in April. Operators have 60 days to respond from reception of the notice.
Telecom secretary R. Chandrasekhar was quoted saying that so far the DoT has received replies from 85 licence holders.
Kunal Bajaj, director at Analysys Mason India, said: “I believe we are likely to see some licences being cancelled and we’ll definitely see some companies being fined because of their involvement in the scandal but also because they failed to meet some policy requirements.”
Loan struggle for S Tel
Mobile operator S Tel may reportedly fail to secure a Rs9.53bn (US$212m) loan facility from a consortium of banks led by IDBI because the Batelco-controlled cellco is being investigated as part of the 2G scam.
The nine-year facility, which carries an interest rate of 12.75%, is arranged by IDBI, State Bank of India, Canara Bank, Punjab National Bank, Central Bank of India, Union Bank of India, Allahabad Bank and Bank of Baroda.
But the Department of Telecommunications (DoT) has reportedly refused to sign a tripartite agreement for the loan until the Supreme Court makes a judgment on the case.
Newspapers explained that DoT approval on loans secured by telcos is necessary because their licences are considered as surety.
Loop proposes licence sale
Cellco Loop Telecom has reportedly submitted an affidavit to the Supreme Court suggesting to put its 2G licence up for auction.
It has requested to be allowed to match the highest offer during the sale process. If it fails to re-acquire the spectrum, Loop was quoted saying it should be refunded the Rs14.5bn (US$321m) it paid for the licence in 2008. The government would be allowed to keep the extra cash raised by the sale.
Late February, the CEO of Loop, Sandeep Basu, was questioned by the CBI following allegations that Essar Group used Loop as a front to get licences illegally in 21 areas in January 2008.
Loop has denied the allegations, and both firms said they did not contravene Indian shareholding laws, which prevent a telco from holding more than 10% in a competitor operating in the same region. Essar explained that it only had a 2.15% stake in Loop when it originally applied for its Unified Access Services (UAS) licence back in 2007.
