New Delhi: The Central Bureau of Investigation (CBI) questioned Prashant Ruia, chief executive officer of Essar Group, on Thursday as part of inquiries into the allocation of second-generation (2G) mobile spectrum in 2008.
Ruia was questioned about his company’s links with Loop Telecom Pvt. Ltd, which received 21 licences during the spectrum allocation, according to top CBI officials.
“We called him to explain shareholding patterns, and to explain if his company used Loop as a front,” one of the officials said.
The development came a day after the agency questioned Anil Ambani, chairman of Reliance Group, along with former telecom minister A. Raja and Shahid Balwa, promoter of Swan Telecom Pvt. Ltd, over 2G allocation. Raja and Balwa are under arrest for their involvement in the case.
Rajya Sabha MP M.K. Kanimozhi, daughter of Tamil Nadu chief minister M. Karunanidhi, denied she has been called for questioning by the agency. “There is no letter, no questionnaire, nothing. I have no information,” she said on the phone. Kanimozhi is closely associated with Raja as members of the Dravida Munnetra Kazhagam (DMK) party her father heads.
The DMK is a key ally of the Congress party in the governing United Progressive Alliance coalition and any summons to Kanimozhi could sour ties between the two parties.
The CBI officials cited above said she may be questioned by the agency, along with Sharad Kumar, one of the owners of Kalaignar TV.
The CBI has alleged that Raja, who was sent to jail on Thursday for 14 days till the next hearing, favoured Swan in getting spectrum and, in return, Balwa arranged funds for Kalaignar TV.
The agency is investigating a payment of Rs.214 crore by Cineyug Films to Kalaignar TV in 2009.
The funds were arranged by Cineyug Films from DB Realty group firms in which Balwa’s family members are directors and shareholders. Kanimozhi is a director of Kalaignar TV.
According to documents reviewed by Mint, on 5 August 2008, A.K. Srivastava, then deputy director general in the department of telecommunications (DoT), had asked the ministry of corporate affairs to investigate whether the Essar Group was getting “spectrum or licence” in the name of Loop Telecom.
The Essar Group owns a nearly 33% stake in Vodafone Essar, India’s second biggest phone company.
After nearly eight months, R.K. Gupta, deputy director in the ministry of corporate affairs, replied to Srivastava that Loop was owned by Santa Trading Pvt. Ltd (STPL), which also owned BPL Communications and BPL Mobile Communications. “The Essar Group does not have any direct equity in STPL, Loop Telecom. It, however, holds 9.99% in Loop Telecom indirectly,” Gupta wrote.
The Essar Group said the company did not violate any DoT guidelines.
“Essar is in full compliance with DoT licence norms and all other applicable laws. As and when any information is sought, Essar will provide the same to the authorities,” it said in a statement.
Loop said in a statement that it was in compliance with Unified Access Service (UAS) licence norms and is fully cooperating with the government’s investigating agencies.
The investigating agency has thus far questioned top officials of telecom and real estate firms including Unitech Ltd, DB Realty Ltd, Tata Realty and Infrastructure Ltd, S-Tel and Loop Telecom as part of its investigation into the 2G allocation.
Unitech MD Sanjay Chandra, Tata Realty’s MD Sanjay Ubale, Loop’s chief executive officer Sandip Basu, S-Tel’s chief financial officer Arun Madhana and chief regulatory officer Rupinder Sikka have been questioned by CBI in Mumbai and Delhi.
Liz Mathew contributed to the story.