New Delhi: Five senior executives from three well-known Indian companies were sent to jail on Wednesday in a move that both reinforces impressions about crony capitalism continuing to rule in the country and highlights attempts to weed out corruption, irrespective of the stature of the people involved.

The executives, Unitech Wireless Ltd’s managing director Sanjay Chandra, Anil Ambani-owned Reliance Group’s managing director Gautam Doshi, and senior vice-presidents Hari Nair and Surendra Pipara, and DB Realty Ltd managing director Vinod Goenka, were sent to jail for their alleged involvement in the issue of telecom licences and spectrum in 2008—popularly known as the 2G or spectrum scam.

“The message is the prosecution seems to be on course and is quite serious. As far as foreign direct investment and serious investors are concerned, this can only be good news. It is a signal that any mischief makers will be dealt with in accordance with law," said Mahesh Uppal, a regulatory expert and director with Com First (India) Pvt. Ltd.

The jailing of the executives is likely to prompt changes in their companies. Norway’s Telenor Group, the majority partner in Unitech Wireless, asked Chandra to step down. DB Realty said it is in the process of appointing new directors. The Reliance Group declined comment.

It is also certain to add momentum to the investigation and litigation surrounding the issue of licences to telcos, allegedly on favourable terms and could, if the government finds reason to do so, result in the cancellation of licences issued to at least some firms.

Facing the heat: Former telecom minister A. Raja (right), Unitech Wireless MD Sanjay Chandra (centre) and Reliance Group senior vice-president Surendra Pipara, at Patiala House courts in New Delhi. PTI

All the executives immediately appealed for relief from the Delhi high court, which will hear them on Thursday.

Special CBI (Central Bureau of Investigation) judge O.P. Saini rejected the bail pleas on the ground that this is a case involving serious allegations of corruption.

“There are serious allegations against the applicants/accused persons as are referred to above. There is incriminating evidence on record, which I have not deliberately discussed at this stage," he said.

The court also accepted CBI’s argument that the executives, by virtue of their positions, could possibly influence witnesses or tamper with evidence if they were not immediately sent to jail.

Saini further rejected pleas for a 7- to 15-day interim bail, which the executives said they needed in order to delegate duties to others.

The executives join DB Realty’s managing director Shahid Balwa, who is already in jail.

Telenor, which has been trying to distance itself from the controversy, asked Unitech to appoint a replacement for Chandra. “Telenor Group supports transparency and predictable frameworks for the telecom industry. Telenor has zero-tolerance for corruption, and if the CBI trial proves any malpractice, those responsible must be brought to book," said Glenn Mandelid, director of communications for Asia region at Telenor Group, in a statement.

“For some foreign companies like Telenor, this (development) is a concern since their licences are facing a bit of a question mark. But for future investors, there is clarity on what is not acceptable in India," added Uppal.

A Unitech Ltd spokesperson said the group’s real estate business would not be affected by Chandra’s imprisonment.

DB Realty, too, said its operations wouldn’t be affected.

A financial analyst said he’d like to see quick action in the case. “This is a start, but it has to conclude and more importantly, the punishment has to be substantial so as to act as a deterrent," said Prithvi Haldea, managing director of Prime Database.

Several analysts and experts have expressed fears that the wave of corruption-related cases in India could prevent foreign investors from investing in the country and dent the much-touted India story.

Shares of Unitech Ltd and DB Realty, whose parent DB Group is Etisalat’s India partner, fell 5.13% and 4.22%, respectively, on Wednesday. Shares of Reliance Communications Ltd fell 1.99%.

Shauvik Ghosh also contributed to this story.