CBI questioning its executives, says RCom

Anil Ambani-controlled Reliance Communications today said some of its executives were being questioned by the Central Bureau of Investigation (CBI) over the Rs 1.7 lakh crore 2G scam.

“As part of its ongoing investigations pursuant to the Supreme Court’s orders, 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, CBI has also examined a few officials of the Reliance ADA Group, and we are fully cooperating with the authorities in this regard,” the company said in a statement.

The statement comes just a couple of days after the company denied rumours in the market that it was being probed by the government’s investigation wings. The group had seen more than Rs 11,500 crore wiped off its overall market value because of the market buzz.

After the sharp fall in the share price, the group filed a complaint with the market regulator urging a probe into the alleged illegal trading in its groups’ stocks and claimed it was being targeted by rivals, who were spreading baseless sensational charges against it.

Meanwhile, media reports said Shahid Balwa, managing director, DB Realty, had admitted to his company’s links with Reliance Telecom (RTL). Balwa is also the vice-president of Etisalat DB, formerly known as Swan Telecom. The latter is being closely scrutinised by investigative agencies after the Comptroller and Auditor General report said Swan had received undue favours from former telecom minister A Raja, who was arrested recently.

When CBI was contacted by Business Standard, the official spokesperson declined to comment. “The investigation is under progress. Hence, any comment would be detrimental to the case,” he said.

According to reports, Balwa said, in 2008 DB Realty had decided to pursue the opportunity in the telecom sector as a lead partner. Reliance Telecom was supposed to hold a minority stake with a commitment to share passive infrastructure.

Reliance Telecom sold its share to Delphi Investment, a Mauritius-based company, Balwa reportedly admitted to CBI. Swan sold 45 per cent stake at Rs 4,200 crore in its company which it had acquired by paying a licence fee of Rs 1,537 crore.

Balwa’s reported admission is in tune with the allegations made by CAG earlier, which had stated that Swan was acting as a front company on behalf of RTL, a unit of RCom. According to government policy, a telecom operator should have less than 10 per cent stake in another telecom company. By holding 10.71 per cent in Swan Telecom, ADAG had broken this rule, according to CAG.

Earlier, RCom had refuted these charges. “Our group had no shareholding in Swan Telecom at the time of grant of licence to them or any time thereafter, and that issue is accordingly not relevant to our company. RCom has always been in full compliance with all applicable laws, rules and regulations, and there has been no violation of our licence conditions at any stage on account of cross-holdings in excess of 10 per cent,” the statement had said.

Vivek Goenka, MD of DB Realty, did not respond to calls and text messages. UAE-based Etisalat said they would respond tomorrow as it is a holiday for the company.

Four people, including former telecom minister A Raja, Siddharth Behura, R K Chandolia and Shahid Balwa have been arrested till now with regard to the 2G scam.