DMK linked to telecoms scandal

NEW DELHI Thu Feb 10, 2011 10:50pm IST

Former telecommunications minister Andimuthu Raja (C) leaves the court after his hearing in New Delhi February 10, 2011. REUTERS/Adnan Abidi

Former telecommunications minister Andimuthu Raja (C) leaves the court after his hearing in New Delhi February 10, 2011.

Credit: Reuters/Adnan Abidi

Related Topics

NEW DELHI (Reuters) - The police on Thursday linked the Dravida Munnetra Kazhagam (DMK) to a multi-billion dollar telecoms scam, dealing a fresh blow to a government already crippled by corruption scandals.

A police lawyer told a court companies linked to a telecoms firm under investigation for buying mobile licences at unfairly cheap prices had paid 2.14 billion rupees ($47 million) to a TV channel run by the DMK, which helps the ruling coalition maintain its slim majority in parliament.

The main opposition Bharatiya Janata Party, which had brought parliament to a standstill demanding a probe into India's biggest corruption scandal, has said Prime Minister Manmohan Singh's reliance on the DMK prevented him from quickly probing the case.

The latest court documents come a day after the government appeared close to agreeing to a broad, cross-party investigation in the scandal, paving the way for parliament to resume as normal on Feb. 28 for a session that will see discussions on the budget.

The scam does not threaten the survival of the government, but it has tarnished Singh's reputation and rattled investors in Asia's third largest economy.

While scrambling to control the fallout from the scandal, one of the many during the Congress' second term, the government is also distracted from policymaking, further delaying crucial economic reforms such opening up the retail and financial sectors to foreign investors.

Court documents filed by the Central Bureau of Investigation, and seen by Reuters, showed that a company linked to Shahid Balwa, the vice chairman of a joint venture between a local firm and Abu Dhabi's Etisalat, had given the money to a TV station what was linked to Andimuthu Raja, the disgraced telecoms minister who was sacked over the scandal.

Authorities have arrested Raja, a DMK member, and Balwa in connection with the scandal, in which the government is alleged to have lost as much $39 billion in the award of second-general telecoms licences in 2008.

"There was a transaction of about 2.14 billion rupees from Cineyug Films to Kalaignar TV in the year 2009," the court documents said.

The document said Kalaignar TV, which is controlled by the DMK, was linked to Raja and that the money was given to Cineyug by firms controlled by Balwa and his relatives

Balwa's laywer, Vivek Aggrawal, told the court the money was related to a deal Cineyug was considering with Kalaignar TV.

"At the last moment our talks fizzled out. This money has been returned," he said. DMK officials declined to comment.

Separately, the Supreme Court suggested on Thursday a special court try all cases related to the telecoms scandal. The government has two weeks to respond to the suggestion.

(Additional reporting by Devidutta Tripathy; Editing by Krittivas Mukherjee and Miral Fahmy)

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

REUTERS SHOWCASE

Bollywood Update

Bollywood Update

Movie Review: Happy New Year.  Full Article 

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Bigger Role

Bigger Role

Google's Pichai to oversee major products and services.  Full Article 

Diwali Glitter

Diwali Glitter

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

Ebola in U.S.

Ebola in U.S.

Two U.S. states to quarantine health workers returning from Ebola zones.  Full Article 

New World Bank Rival

New World Bank Rival

Three major nations absent as China launches World Bank rival in Asia  Full Article 

Assault on Pires?

Assault on Pires?

ISL probes allegation of assault on Pires  Full Article 

Kalki Interview

Kalki on Margarita

Kalki on her role in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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