New Delhi: Anil Ambani, chairman of the Reliance Group, was questioned on Wednesday by the Central Bureau of Investigation (CBI) in connection with his company’s association with the Shahid Balwa-promoted Swan Telecom Pvt. Ltd and alleged favours granted during the allocation of spectrum in 2007.
A day earlier, CBI had questioned top executives of Unitech Ltd, DB Realty Ltd, Tata Realty and Infrastructure Ltd, S-Tel and Loop Telecom as part of its investigation into alleged irregularities in the allocation of second-generation (2G) spectrum.
CBI arrested Balwa, also the promoter of DB Realty, on 8 February and is currently interrogating him in custody.
Two CBI officials said, on condition of anonymity, Ambani was questioned about his group’s association with Swan Telecom as indicated in a report by the Comptroller and Auditor General (CAG). The Reliance Group was earlier known as Reliance-Anil Dhirubhai Ambani Group.
The government’s auditor says in its report that Swan Telecom acted as a front for Reliance Telecom, a subsidiary of Reliance Communications Ltd, or RCom, while applying for UAS (unified access service) licences in 13 telecom operating areas, and that its application was against licensing guidelines.
At the time of applying for the licences, Reliance Telecom Ltd had a 10.71% stake in Swan Telecom, CAG says.
CBI has said that Swan Telecom, immediately after receiving the licences for Rs1,537 crore, sold 45% of its stake to the UAE’s Etisalat DB for nearly Rs4,200 crore.
Swan has previously denied the charge.
“Since Reliance Telecom Ltd was operating in all the service areas for which Swan had applied for UAS, the application of Swan was not in conformity with the UASL guidelines, hence was not eligible to be considered,” CAG says in its report.
It adds that as the department of telecommunications (DoT) did not have any mechanism to verify the correctness of the shareholding patterns of applicants, the matter should have been referred to the ministry of corporate affairs as was advised by its finance wing.
The matter was not referred to the ministry and Swan was allowed to resubmit a revised stakeholding pattern in December 2007, nine months after their original date of application, declaring that Reliance Telecom had divested its entire stake in the company, according to the CAG report.
CAG has pegged the notional loss to the exchequer from the award of frequencies at Rs1.76 trillion, and CBI at Rs22,000 crore.
CBI has also arrested former telecom minister A. Raja, his then personal secretary R.K. Chandolia, and then telecom secretary Siddharth Behura.
“Ambani was asked about (the) shareholding pattern of both Swan and Reliance Telecom. He was also asked about the letter written by Balwa in which he had admitted that ADA (Reliance Group) brought preferential shares in his company to set up business,” said one of the CBI officials cited earlier in the story.
Ambani had offered to appear before CBI, Reliance Group said in a statement.
“During the course of his weekly visit to New Delhi, Anil Ambani met CBI officials today to clarify ongoing issues relating to telecom matters for the years 2001 to 2010 and virtually every telecom operator in the country,” it said.
“Neither Reliance Telecom, nor RCom, nor any Reliance ADA Group individual, company or affiliate held even a single share in Swan Telecom Ltd at the time of grant of the 2G licence to them in January 2008, or at any time thereafter,” the group said. None of these entities “obtained any monetary gain or other benefit, directly or indirectly, from the grant of 2G licence to Swan Telecom...,” it added.
CAG’s report also says the erstwhile Reliance Infocomm Ltd, now known as RCom, hurriedly deposited the fee of Rs1,654 crore and acquired the right of allocation in 20 service areas on the day the policy was announced. “The allocation in 2007 was done at the price of 2001,” it says.
CBI has registered two preliminary inquiries—one on dual spectrum allocation and the other on telecom firms pledging spectrum licences for bank loans—on the direction of the Supreme Court, which has asked for a thorough probe from 2001-2007.