CBI probes own prosecutor in 2G case; Unitech plunges 18 percent

REUTERS - The Central Bureau of Investigation (CBI) said it is looking into whether a prosecutor for the agency discussed a probe into alleged corruption in the allocation of mobile phone airwaves five years ago with one of the people being investigated.

Shares in Unitech(UNTE.NS) slumped more than 20 percent after reports on CNN-IBN and in the Times of India that CBI senior prosecutor A.K. Singh is suspected to have discussed the case with Unitech Managing Director Sanjay Chandra in a recorded conversation, reports Unitech strongly denied. The shares ended down nearly 18 percent.

CBI spokeswoman Dharini Mishra told Reuters that Singh was under internal investigation after the agency received a compact disc from an anonymous source on February 6. She said the CBI was investigating the authenticity of the recording.

Unitech is a real estate developer that had a mobile phone joint venture with Norway's Telenor that was among those whose licences were revoked by a court following the high profile licensing scandal.

Telenor is in the process of dissolving the joint venture.

The two media reports said the recording was suspected to be of Singh coaching Chandra about how to deal with CBI investigators probing irregularities in the allocation of 2G airwaves.

Unitech issued a statement calling the recording fabricated.

"He (Chandra) wishes to make it absolutely clear that he has never met the prosecutor in the 2G case outside of Court or had any phone conversation with him," Unitech said.

"He denies the suggestion that his voice is on any alleged recording. It appears a fabricated voice recording has been sent anonymously to the CBI. Any suggestion that Sanjay Chandra is linked with this recording is nothing but an attempt to malign him and prejudice his defence in the 2G case."

(Reporting by Rafael Nam, Aditi Shah, Devidutta Tripathy and Satarupa Bhttacharjya; Editing by Tony Munroe)