Agency hunts for end beneficiary of stake sale
The Central Bureau of Investigation (CBI) probe into Reliance Telecom?s (RTL) suspicious stake transfer to Swan Telecom in December 2007 has hit a dead end, thanks to non-cooperation from Swiss authorities. The CBI revealed this in a presentation on July 24, made before the joint parliamentary committee (JPC) probing the 2G scam.
The CBI said though a letter rogatory to find out the ultimate beneficiary of the stake sale was sent to Swiss authorities and is being pursued by the Indian embassy in Switzerland, the latter was yet to accept the presence of the agency?s team in the country.
Explaining the necessity of Swiss cooperation, the CBI said though it did not have any evidence of criminal misconduct in the allocation of dual technology spectrum to Reliance Communications a day before the policy was announced in October 2007, there was the issue of suspicious stake sale and the end beneficiary of the same needs to be established. The CBI suspects there was a quid quo pro deal between RTL and unknown public servants.
The CBI says RTL, a wholly-owned subsidiary of CDMA service provider RCom, had created Swan Telecom with its own funds. Swan later applied for and received licences to procure GSM spectrum. However, once the department of telecommunications approved the dual technology policy in October 2007 whereby RCom also got GSM spectrum, RTL sold its entire stake in Swan in the next two months to Mauritius-based Delphi Investments. The CBI charge is that since cross-holding norms bar a telecom firm from holding more than a 10% stake in another telecom firm within the same circle, RCom violated the law. The company has consistently denied this. A case was registered, three senior executives of the ADA Group, of which RTL and RCom are part of, were arrested and subsequently released on bail while the trial by a special CBI court is on. Promoters and executives of Swan were also arrested and are out on bail currently.
Explaining its suspicion on the RTL-Delphi deal, the CBI told the JPC that the equity transfer happened for a mere $4 million. ?Had these shares been valued at the value agreed to between Etisalat Mauritius Ltd and Swan Telecom later in October 2008, the shares were worth $100 million,? the agency told JPC.
It is in this background that the said transfer of shares to Delphi Investments is suspected by the CBI to be quid pro quo by RTL to unknown public servants. Etisalat had bought 45% stake in Swan in October 2008 for around Rs 4,000 crore.
To get to the bottom of the case, CBI had sent a letter rogatory to Mauritius in January 2011 and a supplementary LR in May the same year to spot actual beneficiaries of the said investments. It found that immediately before shares of RTL were transferred to Delphi, all entire shares of Delphi were taken over by Mavi Investment Fund Ltd. Accordingly, Mavi Investment Fund was the beneficiary of the said investment, which was at that point of time held by BTS Belvoir Investments AG of Switzerland. This led the CBI to send an LR to Switzerland, which is yet to be entertained by the authorities there.
