CBI names Swan, Unitech in telecoms scam

NEW DELHI Thu Feb 3, 2011 4:07pm IST

The sun rises behind a communications tower in New Delhi March 20, 2006. Two Indian companies, in which Norway's Telenor and the UAE's Etisalat now hold large stakes, were given preferential treatment in awarding mobile licences, the CBI said, in a sign a corruption scandal could spread to the business world. REUTERS/B Mathur/Files

The sun rises behind a communications tower in New Delhi March 20, 2006. Two Indian companies, in which Norway's Telenor and the UAE's Etisalat now hold large stakes, were given preferential treatment in awarding mobile licences, the CBI said, in a sign a corruption scandal could spread to the business world.

Credit: Reuters/B Mathur/Files

Related Topics

NEW DELHI (Reuters) - Two Indian companies, in which Norway's Telenor and the UAE's Etisalat now hold large stakes, were given preferential treatment in awarding mobile licences, the CBI said, in a sign a corruption scandal could spread to the business world.

A Central Bureau of Investigation (CBI) lawyer named Indian companies Swan and Unitech as receiving favourable treatment over awarding of licences in 2008 in the world's fastest growing mobile phone market.

The CBI, the Indian equivalent to the FBI, arrested former telecoms minister Andimuthu Raja on Wednesday over irregularities in awarding licences and radio spectrum at below market prices, potentially causing a loss to the India of up to $39 billion.

"Undue favours were granted in the allocation ... The companies were favoured and spectrum and licences were awarded at a low rate," special public prosecutor Akhilesh, who uses only one name, told the court.

The telecoms corruption scandal has reached all the way to Prime Minister Manmohan Singh, who has been forced by the Supreme Court to explain why he took more than a year to look into allegations of wrongdoing in awarding of licences in 2007-2008.

Singh decided not to pursue a case against his minister. Instead the CBI went after Raja after the Supreme Court ordered it to do so.

The opposition stalled parliament late last year over demands the government agreed to a full parliamentary probe into what is considered the biggest corruption scandal in decades, touching the core of the coalition government.

The government is currently not at risk of collapsing because it holds a slim majority but the scandal has shaken the reputation of Singh, who has been asked to resign by the opposition.

Raja, who was sacked in November, is accused of misuse of his ministerial office to give favourable treatment to certain companies in the licence process, criminal misconduct and having unaccounted assets.

Ramesh Gupta, a lawyer for Raja, said the former minister had followed existing rules and had not committed any wrongdoing.

Norway's Telenor, which is 54-percent owned by the Norwegian state, has a majority stake in Unitech Wireless. UAE's Etisalat owns about 45 percent of Swan, which has since been renamed as Etisalat DB.

Both companies were not immediately available for comment but have in the past denied any wrongdoing.

Both Telenor and Etisalat bought their stakes at a considerable premium after the Indian firms were given the licenses.

(Additional reporting by Devidutta Tripathy; Writing by Paul de Bendern; editing by Alistair Scrutton)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Sino-Indian Ties

REUTERS SHOWCASE

Eyeing Stocks

Eyeing Stocks

Interview - EPFO chief urges green light to buy stocks  Full Article 

Stimulus Reports

Stimulus Reports

China cenbank injects $81 bln into major banks to support economy - reports  Full Article 

Ranbaxy Investigation

Ranbaxy Investigation

Ranbaxy says U.S. authorities seek information on pricing data.  Full Article 

Monsoon Update

Monsoon Update

Delayed retreat of monsoon rains to start this weekend  Full Article 

Financing Deal

Financing Deal

IndiGo agrees $2.6 billion aircraft finance deal with China's ICBC  Full Article 

Fed Policy Meeting

Fed Policy Meeting

Fed could hint on rate-hike plans as it prepares for policy turn  Full Article 

Grim Outlook

Grim Outlook

Sony deepens loss estimate on struggling smartphone business  Full Article 

Sugar Surplus

Sugar Surplus

India to produce surplus sugar for fifth straight year - industry body  Full Article 

Business Sentiment

Business Sentiment

China, Singapore slowdown weigh on Q3 Asia business sentiment   Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage