The agency, which is probing the 2G spectrum scam, also said on Tuesday that Swan and Loop hid vital details about their companies to get spectrum and they will be facing charges of cheating and criminal conspiracy.
The two were among the nine firms that were granted new licences by former telecom minister A Raja in January 2008, which the CAG later said caused a loss to the exchequer of R1.76 lakh crore. It was the CAG which first said in its report last November that Swan was a front company for RCom, something the latter continues to deny.
The charge against RCom and the Essar Group is that they violated the cross-holding norm, which bars a telecom firm from having more than a 10% stake in another telecom firm within the same circle. RCom had services in areas where Swan applied for licences and the Essar Group owns 33% stake in Vodafone Essar, which operates in areas where Loop has licences.
The CAG report has said that at the time of application, the stake of Reliance Telecom (a 100% subsidiary of RCom) in Swan was 10.71%. The department of telecommunications (DoT) did not have any mechanism to verify the correctness of its shareholding pattern and, hence, the matter should have been referred to the ministry of corporate affairs (MCA) as was advised by DoTs finance wing. However, no reference was made to the MCA and instead, Swan was given an opportunity to resubmit a revised shareholding pattern in December, 2007 nine months after their date of application which declared that Reliance Telecom had divested its entire stake. This was accepted by the DoT and Swan was given the benefit of seniority from the date of their initial application, ie, March 2007, the CAG has said.
As Swan Telecom did not meet the eligibility criteria on the date of application, its application should have been rejected by DoT and the company should have been directed to apply afresh. Even if it was to be considered eligible on the basis of its old application, the date of priority based on the first-come-first-served basis should have been revised from March 2007 to December 2007 in order to ensure fairness. Had it been so, the company would have been out of the race as the DoT processed only those applications which were received up to September 25, 2007, the CAG has noted.
The CBI, which filed a status report in a sealed envelope before a bench of Justices GS Singhvi and AK Ganguly, said Raja will face charges of cheating, forgery, and corruption.
Swam Telecoms promoter Shahid Balwa is under arrest, while RCom chairman Ambani has already been questioned by the CBI, as is the case with Loop Telecom CEO Sandip Basu and Essar Group CEO Prashant Ruia. The agency said that there was evidence of forgery in altering of the first-come-first-served policy to allow some companies to get 2G spectrum during Rajas tenure as telecom minister.
It said the main chargesheet will be filed on April 2 against four individuals including Raja, some telecom executives and two companies for their involvement in the 2G scam. The CBI also said that the supplementary charge sheet will be filed by April 25 and investigation in the scam will be completed by May 31.
Senior advocate KK Venugopal, appearing for the CBI, while placing a transcript of telephonic conversations between corporate lobbyist Niira Radia and top corporate leaders and politicians, said, These telephonic records will be used as evidence in criminal prosecution of the accused in the scam.
The Bench, after hearing his argument, said there is no need to file the draft chargesheet for approval as directed by it earlier as the CBI has assured the court that the chargesheet will definitely be filed on April 2.
CBI arrests 2 more in 2G scam probe
* The CBI on Tuesday arrested two more people Asif Balwa and Rajeev B Agarwal for alleged involvement in money transfer to DMKs Kalaingar TV channel in connection with the 2G spectrum case in which the agency will file the first chargesheet on April 2. The two were arrested after they allegedly did not cooperate with the CBI during their interrogation. Asif is the younger brother of former MD of DB-Etislat group Shahid Balwa, who has already been arrested by the CBI.