New Delhi: Reliance Telecom Ltd, one of the three companies accused in the so-called second-generation (2G) telecom scam, on Wednesday denied the charges against it in a special Central Bureau of Investigation (CBI) court and said no criminal case can be made out against the company as it did not violate the terms of spectrum licensing.
“No criminal case is made out against Reliance Telecom Ltd (RTL) as it held only 9.9% equity in Swan Telecom Pvt. Ltd (STPL) when the latter was granted spectrum licences,” Iqbal Chagla, senior counsel for the Anil Ambani-controlled telecom company argued before special CBI judge O.P. Saini.
“So far as the guidelines (of the department of telecommunications) are concerned, they only prohibited an existing telecom company from holding shares in excess of 10% in another telecom company. We held 9.9% stake in Swan Telecom and no case is made out against us,” the lawyer said.
Chagla opposed the framing of charges against the company named by the federal agency in its first chargsheet for criminal conspiracy, forgery and cheating. The CBI has alleged that at the time of applying on 2 March 2007, Swan was an associate of Reliance Anil Dhirubhai Ambani Group/Reliance Communication Ltd (RComm)/RTL. Reliance Anil Dhirubhai Ambani Group has since been renamed Reliance Group.
Tiger Traders Pvt. Ltd (TTPL) was also an associate of the Reliance Group, the CBI said.
“Both companies had no business history and were activated solely for the purpose of applying UAS (unified access services) license in 13 telecom circles, where RTL did not have GSM spectrum and RComm had already applied for dual technology spectrum for these circles,” the CBI said in its chargesheet.
“The accused structured the stake holdings of STPL in a manner that only 9.9% equity was held by STPL and rest 90.1% was shown as held by Tiger Traders Pvt. Ltd, although the entire company was held by Reliance ADA Group of companies through the funds raised from Reliance Telecom Ltd,” it said.
The CBI said the corporate affairs ministry has also confirmed that STPL was an associate of RTL and RComm. “Investigation showed that RTL, which is a subsidiary of RComm had invested in STPL in the form of minority equity stake and preference shares. Investigations have also revealed that certain complaints alleging substantial stake of Reliance ADA Group in STPL as on date of application were received by DoT but Siddharth Behura (then telecom secretary) and A. Raja (then telecom minister) ignored it,” it said in the chargesheet.
The defence counsel said STPL cannot be held an associate firm of RTL as the latter did not have any say in deciding the board members of STPL. “The guidelines only prohibited an existing telecom company from holding shares in excess of 10% in another telecom company,” he said.
He said the CBI’s interpretation of DoT cross-holding norms is flawed and beyond its authority. He argued there was no charge of corruption against RTL and three Reliance executives.
The CBI had further alleged Gautam Doshi (managing director of Reliance ADA group) and Hari Nair (senior vice president of Reliance ADA Group) carried out inter-company transaction of STPL, Tiger, RComm and RTL.
“The day-to-day affairs of STPL and Tiger were managed by the said accused, either themselves or through other officers/consultants related to Reliance ADA group. Commercial decisions of STPL and Tiger were also taken by the accused persons of Reliance ADA group,” the chargesheet said.