Abu Dhabi, November 22: Swan Telecom, the biggest beneficiary of former telecom minister A Raja’s largesse, has also been investigated by the home ministry for a suspected link between its promoters and underworld don Dawood Ibrahim’s firms abroad.
It was this suspected link that forced the home ministry to put an unusual rider that the main Indian promoter of Swan Telecom should not be on the board of directors of the company.
The matter came to light with UAE-based telecom firm Etisalat, which has 45% stake in Swan, submitting a proposal to the Foreign Investment Promotion Board for raising it to 50%. The home ministry, while raising an objection to the proposal, put a bewildering rider – the proposal could only be granted approval if Shahid Usman Balwa, the promoter of the realty firm DB Group (promoter of Swan) not only steps down as director from the board but also severs all other ties with the company. The rider was strange because the DB Group, which has interests in real estate sector in Mumbai, was the majority equity partner in Swan and normally security-related riders are put on the foreign partner.
Home ministry sources said the rider was put because it was suspected that one of the directors of DB Group was also a director of some Dawood firm. The ministry wanted to probe it thoroughly. “Later upon enquiry, it was found that the link was very tenuous and not clearly established but still the government wanted a further detailed investigation,” sources said. Later in September the FIPB rejected Etisalat’s proposal.
As highlighted by the recent report of the Comptroller and Auditor General of India (CAG), Swan was the biggest beneficiary of the former telecom minister A Raja’s largesse in awarding licences to a host of firms at dirt cheap rates. Swan was granted licences in 13 circles and acquired two more circles when another new licensee, Allianz Infratech merged with it.
Its application for licences submitted in March, 2007 was ineligible for processing because then Anil Ambani’s firms held more than 10% stake in the firm against the cross-holding norms which applies in the telecom sector. According to CAG, Anil’s firms only divested their stake from Swan in December, 2007.
Last week, the Telecom Regulatory Authority of India recommended to the department of telecommunications to cancel all the 15 licences of Swan for not being able to roll out services within a year of being granted spectrum.
——–Agencies