2G scam nets 5 top honchos

Written by Indu Bhan | Indu Bhan | Updated: Apr 21 2011, 08:28am hrs
In one of the biggest blemishes on the face of India Inc, five top corporate executives were arrested and sent to Tihar Jail after being denied bail on Wednesday over their alleged involvement in the spectrum scam. Those arrested include two promoters Sanjay Chandra MD of Indias second largest realty firm Unitech and Vinod Goenka, MD of DB Realty and three top executives of Anil Dhirubhai Ambani Group group MD Gautam Doshi and senior vice-presidents Hari Nair and Surendra Pipara. The arrests have no parallel in Indias corporate history, except for a short period of raid raj in late 1980s. It is also perhaps the first time that senior officials of a group, which ranks among the top 10 firms by market capitalisation, have been chargesheeted in a scam and sent behind bars.

Within an hour of Chandras arrest, Norways Telenor which holds 67.25% stake in Uninor (Unitech Wireless), issued a statement requesting him to step down as the chairman of the company. Telenor said that it had sent a letter to Chandra to this effect earlier this month. DB Realty issued a statement saying Goenkas arrest would not have any effect on the company as the telecom business had no direct or indirect link with the realty business. A Unitech spokesperson too said the development would not have any effect on Unitech or its real estate business as the case relates to Unitech Wireless, which is a separate venture in the telecom business.

Wednesdays arrests happened after the special CBI court trying the 2G case rejected their bail applications. More arrests are expected after April 25, when the CBI files its second charge sheet in the case. The arrested executives will be produced from the jail on each and every day of the hearing, CBI lawyer AK Singh said.

Special judge OP Saini rejected the petitions citing CBIs apprehensions that the accused may tamper with evidence and influence witnesses. Saini also dismissed their interim bail applications seeking protection from arrest for the next seven days on grounds that they had to make arrangements to manage their business responsibilities in their absence. A bare perusal of the facts of the case and the allegations in the charge sheet make it out a case of the highest magnitude and gravity and there is enough incriminating material on record against the accused, the judge said. Following the court order, the five executives were arrested by the CBI.

Immediately after their arrest, the five accused through senior counsel KTS Tulsi and NK Kaul appealed the Delhi High Court, which may take up the petitions on Thursday. The move assumes significance since the Supreme Court, which is monitoring the progress of the case, had made it clear that no court other than itself will entertain any application or petition relating to the 2G case.

The CBI had filed the first charge sheet on April 2 for allegedly committing offences of forgery and cheating under the IPC and for offences of giving and accepting bribe and abusing official position under the Prevention of Corruption Act.

With the latest arrests, a total of 11 people are now in judicial custody in the 2G scam. Former telecom minister A Raja, his former aides Siddhartha Behura and RK Chandolia, Swan Telecom MD Shahid Balwa, his brother Asif Balwa and Rajiv Agarwal, a DB Realty exectuive are already under arrest.

The CBI has indicted Raja for conspiring with senior bureaucrats and corporate honchos to cause a loss of R30,984 crore to the exchequer in the allocation of 2G spectrum.

CBI has alleged that Behura, Chandolia, Balwa and Chandra entered into a conspiracy for manipulating the procedure for allocation of spectrum with the aim of favouring companies like Swan Telecom and Unitech Group.

Shares in Unitech and DB Realty, fell as much as 8% and 1.5% respectively on Wednesday after the bail petitions were rejected. Shares of Reliance Communications fell as much as 5.8%. The shares later recouped some of their losses.