New Delhi: The Delhi high court on Monday rejected bail to five company executives charged in a multi-billion dollar telecom corruption scandal that has rocked political and business establishments in Asia’s third-largest economy.
Shares in the three firms linked to the executives fell after Judge Ajit Bharihoke read out his order in the packed courtroom of the Delhi high court.
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Sanjay Chandra, the managing director of Telenor’s India partner Unitech; Vinod Goenka, chairman of Etisalat’s India partner DB Group; and three executives from Reliance ADA Group have been held in jail since 20 April, after a lower court had denied them bail.
They are among 14 individuals and three companies charged of rigging a 2007/08 grant of lucrative telecom licences. The scandal may have cost state coffers as much as $39 billion in lost revenue, a sum equivalent to the country’s defence budget.
Bharihoke said the accused were highly influential persons who could try to influence witnesses, especially those in their companies, if released on bail.
“Taking into account the gravity of the accusation against the petitioners, a reasonable possibility of their interfering with the process of justice by tampering with the evidence, I do not deem it appropriate to release the petitioners on bail,” he said in his 34-page long order.
Police have already arrested former telecoms minister Andimuthu Raja, a member of government ally DMK party, and Kanimozhi, the lawmaker daughter of the DMK chief, straining ties between Prime Minister Manmohan Singh’s Congress party and its second-biggest partner in the ruling coalition.
But few expect the DMK to pull out of the government, as the party is weakened following the loss in elections in its bastion state of Tamil Nadu last month. Both Congress and DMK officials have said the coalition is intact.
The telecom scandal is the largest of the several that have emerged in Singh’s second term and has weakened the government’s political authority and spooked investors.
Attacked by a resurgent opposition, policy-making has drifted into limbo and the government has had its energies diverted from pushing forward reforms like freeing up controls on diesel prices or allowing foreign investment into supermarkets.
The case has also spooked investors after a series of questioning of tycoons, including Reliance ADA’s billionaire chairman Anil Ambani, a rare event in India where top businessmen are seen as beyond the reach of police.
All accused have denied any wrongdoing. The executives can now appeal to the Supreme Court. Separately, Kanimozhi, who was arrested on Friday, appealed to the Delhi high court for bail.
After the order, shares in Reliance Communications, the telecom venture of the Reliance ADA group, fell 3.4%. Unitech shares were down 6%, while those in DB Realty, the listed firm of the DB group, dropped 7.5%.
Senior advocate U. U. Lalit, the Supreme Court-appointed CBI prosecutor had opposed the bail pleas, saying the corporate bodies and individuals were direct beneficiaries of the spectrum deal and they were involved in a conspiracy along with former telecom minister A. Raja to obtain benefits.
Besides the five corporate leaders, CBI has named nine persons including Raja and DMK MP Kanimozhi and three companies as accused in the case.
Other accused in the case are Swan Telecom Promoter Shahid Usman Balwa, former telecom secretary Siddhartha Behura, Raja’s personal secretary R. K. Chandolia, directors of Kusegaon Fruits and Vegetables Pvt Ltd Asif Balwa and Rajeev Agarwal.
Director of Cineyug Films Pvt Ltd Karim Morani and Kalaignar TV Pvt Ltd MD Sharad Kumar are also accused in the case.
PTI also contributed to this story