CBI probing STel, DB Group in 2G spectrum scam

THE Central Bureau of Investigation (CBI) is looking into the security related issues regarding S Tel and DB Group as part of its probe into the 2G telecom spectrum scam, the agency told the Joint Parliamentary Committee (JPC) earlier this week. This was one of the many points made in CBI’s 47-page presentation to the JPC.

The CBI is investigating the reasons why the government had given a clearance to S Tel to resume its operations after its services were suspended due to security-related concerns. The matter has been under the scrutiny of the home ministry.

The investigative agency is also looking at the alleged breach of security by the Dynamix Balwas (DB) Group-held airplanes, the CBI told the the JPC. Eon Aviation, a subsidiary of the DB Group, has also been under the scanner over security concerns. While CBI officials did not elaborate on the matter, the agency is learnt to have taken up the matter in the light of the Foreign Investment Promotion Board's (FIPB) observation a few years ago. Some FIPB members had raised security fears on the DB group issue. “The FIPB minutes were suppressed at the time of giving the clearance to the company,” a CBI official said. The official also pointed out that the home ministry had reservations over UAE-based telecom company Emirates Telecommunications Corporation (Etisalat, which had bought a stake in DB Group, on security grounds.

Etisalat, the largest telecom operator in the Arab world, had signed a deal to acquire 45 per cent in Swan Telecom Private Limited (Swan Telecom) for $900 million. Subsequently, Swan and DB Group had merged into one entity, and the company was named Etisalat DB.

On the probe of the transfer of Rs 200 crore by Dynamix Realty, a partnership firm of DB Realty Ltd and other DB group companies, to Kalaignar TV through a circuitous route, the CBI said, “The entire amount was paid by Dynamix Realty after the offshore investments in Swan Telecom from Etisalat Mauritius and Genex Exim Ventures had come in on December 17 2008.” Kusegaon Fruits and Vegetables Pvt Ltd and Cineyug Films Pvt Ltd also were part of the deal.

The CBI also told the JPC the objective of the Dynamix Realty venture was to develop a slum rehabilitation project in Mumbai. “The partnership deed did not provide for any other related project or a project relating to farms and agricultural business or cinematography,” the CBI had said. It added none of the companies involved had the “main object of lending money.”