2G case: CBI says Swan is a front company

NEW DELHI, INDIA: The Central Bureau of Investigation (CBI) on Thursday told a special court here that Swan Telecom is a front company of Reliance Communications and began its arguments on framing charges against 14 accused named in the scandal involving allocation of second generation (2G) airwaves to telecom companies.

CBI Special Judge O.P. Saini began the process of arguments on framing of charges in the scandal, a day after dismissing the plea of former communications minister A. Raja opposing it.

Beginning the arguments, Special Public Prosecutor U.U. Lalit, representing the CBI, said Swan was owned by the Reliance Communications which had 9.9 per cent stake in the company at the time of applying for a licence.

Reliance Communications has consistently denied the charges.

The CBI charged Raja and his secretary R.K. Chandolia with favouring Swan Telecom and Unitech Wireless.

The CBI also claimed that telecom company Spice was more eligible than Swan Telecom and Unitech Wireless for airwaves allocation.

Lalit claimed that offences by the accused have been committed in relation to cut off dates for allocation, "first come first serve" policy, dual technology, eligibility norms and cheating of the government's revenue department.

Lalit said that Raja had given an in-principle approval for grant of dual technology 2G spectrum (airwaves) licences to Reliance, Himachal Futuristic Communications Ltd. (HFCL) and Shyam Telelink September 18, 2007, a day before his ministry officially opened the scheme September 19 for the grant of licences.

"A day later as Tata Teleservices applied for the 2G spectrum licence September 19, the ministry deliberately sat over its plea," said Lalit.

"On September 19, 2007, a press release for approval of dual technology was issued but a day earlier on September 18 itself, Raja granted in-principle approval for dual technology (licence) for Reliance, HFCL and Shyam Telelink," Lalit added.

"On September 19, 2007, Tata Teleservices applied for dual technology spectrum but their application was not treated in a similar fashion. It was kept pending and deliberately so with a design," he added.

I-T Dept allowed to grill Raja

Earlier in the day, the court allowed the Income-Tax (I-T) department to interrogate Raja in connection with the 2G scandal.

The court gave the go-ahead for the interrogation of Raja, Swan Telecom director Vinod Goenka, its promoter Shahid Usman Balwa and Reliance Group executives Gautam Doshi, Hari Nair and Surendra Pipara.

"The I-T department can interrogate all six July 27 to 29," Saini said.

"The I-T department moved three separate applications seeking interrogation of Raja in connection with his family income," said senior standing counsel for the I-T department Sanjeev Rajpal.

Balwa will be quizzed by the I-T official from Mumbai regarding his connection with Etisalat DB telecom.

Another application was moved on behalf of the additional commissioner of Income-Tax, Mumbai, to quiz Balwa, Goenka and three Reliance Group officials.

"Our applications have been allowed by the court and these six persons will be interrogated from July 27-29," Rajpal said later.

The court July 18 allowed the CBI to interrogate afresh Raja, former telecom secretary Siddhartha Behura and Doshi in the lock up of Patiala House court complex for one hour each.

The CBI, in its first charge sheet April 2, accused Raja and eight others, including Balwa, Goenka, Doshi, Nair and Pipara as well as three companies, of causing a loss of Rs.30,984 crore to the exchequer.

Charges of cheating, forgery, criminal conspiracy and corruption have been levelled against the accused, who are currently lodged in Tihar Jail. Other accused include DMK MP Kanimozhi.