CBI raids Raja’s houses in Delhi, Chennai

CBI raids Raja’s houses in Delhi, Chennai

New Delhi: The Central Bureau of Investigation (CBI) raided the homes and offices of a former telecom minister in connection with an alleged $39 billion corruption scam, which has sparked a political deadlock in Asia’s third largest economy.

The Opposition has forced Parliament to stay shut since early November, demanding a joint inquiry into a telecom licence and spectrum scandal in 2007-2008 that a government auditor said may have cost India $39 billion in revenues.

The move against former telecom minister Andimuthu Raja may help the beleaguered coalition government placate the Opposition and break the parliamentary deadlock, which has stalled the passage of key economic reform Bills.

Although there is little threat to the coalition government, the scandals have eroded its political capital since an impressive election victory last year, and have become a test of how Prime Minister Manmohan Singh tackles corruption, which is generally accepted and widespread in India.

Raja denies any wrongdoing and says his innocence will be proven.

R K Gaur, a spokesman of the CBI, said officers were searching the homes of Raja in Delhi and Tamil Nadu, and those of some other former ministry officials in connection with the licence row.

This is the first direct action against Raja, who was sacked last month after the auditor’s report was made public. A senior CBI officer told Reuters Raja would be questioned. “The natural course of action will include interrogating the former minister and anyone else involved in the case," said the official, who declined to be identified. “We have conducted searches at 9 to 10 places and we are investigating five people including A. Raja and former telecom secretary Siddhartha Behura."

Supreme Court pressure on government

The Supreme Court has criticized the CBI for not questioning Raja in its year-long investigation despite him being at the centre of the inquiry. The country’s top court has also dragged the Prime Minister into the scandal by forcing him to answer questions on why he was slow to act against Raja.

The Congress party-led coalition has been struggling to contain the damage from numerous corruption scandals in recent weeks.

A separate bribes-for-loans scandal, which implicates state and private lenders, as well as several sizeable companies, is also being investigated, in addition to other scams, including one linked to the Commonwealth Games.

The deadlock in Parliament is also more of a concern for foreign investors than corruption, as it means longer-term financial reforms will be stalled, potentially hurting India’s rapid economic growth.

Investor-friendly goods and services tax legislation, which is intended to unify a fragmented tax system across India’s 28 states, is at risk of missing a 2011 deadline because of the backlog created by the parliament deadlock.