Saturday, February 12, 2011

India Examines Reliance Anil Ambani Group Officials

The Anil Ambani-headed Reliance Group said a few of its officials have been examined by India's top investigating body in a probe into irregularities of the allocation of mobile phone licenses and bandwidth.
The Reliance Anil Dhirubhai Ambani group is "fully cooperating with the authorities in this regard," it said in an email late Friday.
It is the latest development in a deepening probe by the Central Bureau of Investigation into the government's 2008 sale of second-generation mobile phone licenses and bandwidth at far below market value, which it believes could have cost the government more than $4.88 billion in potential revenue.
It is investigating companies alleged to have benefited from the manipulation of bandwidth allotments, after arresting the then telecom minister and two of his former aides earlier this month.
CBI officials couldn't be reached for immediate comment.
The investigative agency hasn't named any of the Reliance ADA Group companies as having benefited. It has, however, named Swan Telecom Pvt. Ltd.—now called Etisalat DB Telecom Pvt Ltd.—and Unitech Ltd. as among the beneficiaries. Both companies have denied any wrongdoing.
The CBI's probe follows revelations by the Comptroller and Auditor General, a government auditing agency, late November that irregularities in spectrum allocation led to a potential revenue loss of nearly $40 billion to India.
The allegations led to the resignation of Andimuthu Raja as telecom minister in November. The CBI arrested Mr. Raja on Feb. 2.
The CAG report last November accused mobile-phone operator Reliance Communications Ltd., which is part of the Reliance ADA Group, of violating licensing regulations in 2008.
The CAG report contended that Reliance Communications—through wholly owned unit Reliance Telecom Ltd.—held a 10.71% stake in Swan Telecom, which applied for a license in March 2007. This would violate Indian regulations, which don't allow telecom operators to own 10% or more of any rival in the same service areas, the government auditor's report said.
Swan Telecom received a license in January 2008.
The audit report said Swan Telecom appeared to be a "front company" for Reliance Telecom while applying for the license.
Reliance Telecom runs global systems for mobile communications, or GSM, services in eight and of India's 22 service areas. Reliance Communications, India's second largest mobile phone operator by subscribers, is in 14 of the service areas.
The audit agency also said the introduction of dual technology—through which an operator could offer services using both the GSM and code division multiple access platforms—in October 2007 was done in a "hasty and arbitrary manner," which gave the "perception" of favoring some companies, including Reliance Communications.
Reliance Communications has previously denied any wrongdoing in any of the issues.
The CBI this month also named Swan Telecom among the alleged beneficiaries of the irregularities in bandwidth allocation.
It has since arrested Shahid Balwa, the founder of Swan and currently the vice-chairman of Etisalat DB.
Balwa has also denied any involvement in the matter.source

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