Ex-minister, executives charged in India scam

A Raja and Reliance managers indicted for telecoms scandal in which state auditor estimates $39bn may have been lost.

The scandal has damaged confidence in the government of Manmohan Singh and led to calls for his resignation [EPA]

Indian police have charged Reliance ADA group and the Indian joint venture partners of Telenor and Etisalat in a multi-billion dollar telecoms scandal that has rocked the government and business establishments.

Charges were also brought on Saturday against a former minister who headed the telecoms portfolio at the time of a flawed 2008 mobile phone licence allocation process.

Andimuthu Raja was indicted along with the managing director of Telenor’s India partner Unitech, Sanjay Chandra.

Other officials charged include the vice-chairman of Etisalat’s Indian joint venture and three officials of Reliance ADA group.

The scandal involved sale of mobile phone frequency licences for a fraction of their prices.

“The charges are conspiracy, cheating, forgery of documents, abuse of official position and abetment,” AK Singh, special public prosecutor, told reporters after the charges were filed in court.

But not all of the accused face all five charges.

The graft scandal, potentially India’s largest ever, has damaged confidence in the Congress-led coalition government and led to calls for the resignation of Manmohan Singh, the prime minister.

Investors in Asia’s third-largest economy have been rattled by the scam in which India may have lost as much as $39bn due to violations of rules when lucrative mobile phone licences and radio spectrum were granted in 2008, the state auditor estimated.

The sum is equivalent to the country’s defence budget.

The scam is one of the several corruption scandals that have emerged during Singh’s second term, impeding policymaking and diverting the government’s attention away from crucial economic reforms.

Stocks affected

Some of India’s leading businesses have been questioned and past official decisions scrutinised or reversed. These events have weighed on stocks, with the Mumbai market ending the March quarter as the world’s worst performer.

Raja was forced to resign and later arrested over the auditor’s report. He has been accused in court earlier of taking bribes from two firms which are now part of the India operations of Etisalat and of Telenor.

Others arrested include Shahid Balwa, the vice chairman of Etisalat’s Indian venture, and two former government officials, who were also charged on Saturday.

The Reliance ADA officials accused are Gautam Doshi, a group managing director, and senior vice presidents Hari Nair and Surendra Pipara.

All of the accused were ordered to appear in court on April 13.

Police have earlier questioned Anil Ambani, the billionaire chairman of Reliance ADA group and Prashant Ruia, the chief executive of steel-to-telecoms conglomerate Essar group.

A parliamentary panel probing the scandal has summoned iconic business tycoon Ratan Tata and Anil Ambani for questioning next week.

All of the accused have denied any wrongdoing.

The telecoms ministry is considering whether to cancel several licences, after the auditor’s report accused these firms of not being eligible for them, sparking off worries about regulatory stability.

The Supreme Court, under its tough new chief justice, has been monitoring the progress of the case after having reprimanded Singh for not moving quick enough to act against his minister.

Faced with a resurgent opposition, Singh’s government has not been able to undertake economic reforms such as freeing up diesel prices and allowing foreign investors into the supermarket sector.

The corruption scandals, which include charges of graft at the 2010 Commonwealth Games and of officials at state-run banks taking bribes for corporate loans, have tarnished Singh’s image as a clean and effective leader.

They could also affect the performance of the ruling Congress party in five state elections that begin in mid-April, in which the party must perform well or risk the coalition unravelling.

Source: News Agencies