Swan and Loop used as front companies to get spectrum: CBI to SC

Swan & Loop used as front companies to get spectrum: CBI to SC

Former Telecom Min A Raja, along with some corporate czars and telecom companies Swan Telecom and Loop Telecom will be prosecuted on charges of cheating, forgery, corruption in 2G spectrum scam as CBI told Supreme Court that there is ample evidence against them.

The investigating agency on Tuesday told the apex court that a chargesheet running into around 80,000 pages comprising the transcript of telephonic conversations of corporate lobbyist Niira Radia with top business honchos, politicians and others will be placed before a special court set up to exclusively hold trial in the scam on 2^nd April.

CBI and ED informed the court that large-scale violation of Foreign Exchange Management Act (FEMA) and benami transactions were involved in bringing foreign money in Swan and Loop telecom which were acting as front companies by established telecom players to get 2G spectrum illegally during the tenure of former Telecom Minister A Raja.

The fresh status report, which was filed in a sealed cover before a bench comprising justices G S Singhvi and A K Ganguly about the probe carried out by CBI and ED, said Swan Telecom and Loop Telecom were allegedly used as front companies by Reliance Group (ADAG) and Essar respectively. Essar already has stakes in Vodafone.

Senior advocate K K Venugopal, who read out the portion of report, said there was evidence of "forgery" in altering of first-come-first-serve policy by Raja to allow some companies to get 2G spectrum and Swan and Loop hid the details about their companies to get spectrum in illegal manner.

Swam Telecom's promoter Shahid Usman Balwa has been arrested by CBI and ADAG firm RCom's chairman Anil Ambani has also appeared before the agency in connection with the 2G spectrum scam.

Essar Group Chairman Prashant Ruia was also summoned by CBI following the allegation that Loop Telecom had acted as the front company his group.

CBI also said the supplementary chargesheet will be filed by 25^th April and investigation in the scam will be completed by 31^st May.

Venugopal, appearing for CBI, placed a transcript of tapped telephonic conversation of Radia with top corporate honchos and politicians and said "these telephonic records will be used as evidence in criminal prosecution of the accused in the scam."

ED informed the court that Rs 106.95 crore in foreign money was received by telecom company Etisalat (earlier Swan) in return for just one share whose market value was just Rs 270.

The apex court was also informed by ED that it would start "attaching" and "confiscating" the properties of erring telecom companies for "violating" FEMA soon after filing of the chargesheet.

The court, which had fixed 31^st March deadline for filing the chargesheet, extended it to 2^nd April.

CBI and ED, in its report, also informed the court that huge amount from overseas was invested in the erring telecom companies and their team would soon be going abroad, starting from Mauritius, to track the trail of money involved in 2G scam.

"Huge amount has come from forign destinations without the approval of RBI," Venugopal said adding the diplomatic channel has been activated to track the trail of money and Letters Rogatory have been sent to Malaysia, Dubai and USA to collect evidence.

CBI also placed the transcript of entire tapped conversation of Radia before the bench which directed the Income Tax department to file status report on its probe against the corporate lobbyist within four weeks.

While reading out the report, Venugopal said there was a conspiracy in preponing the cut-off date for the spectrum allocation and the names of the persons involved in the scam cannot be disclosed in an open court as each one is an important person.

The CBI also told the court that it has investigated the of transfer of Rs 206 crore from a firm of Balwa to Kalaignar TV which is owned by DMK's first family in connection with 2G spectrum scam.

The bench, after going through the report, expressed satisfaction on progress made in the probe.

"CBI has so far done more than satisfactory job," the bench said while asking the agency to inform it if there is "slightest" interference in the probe from any quarter.

The bench also sought a response from the Centre and CBI over expanding the ambit of probe to decisions taken by the Telecom Ministry in 1999.

Delhi government had on Monday issued a notification designating Additional Sessions Judge Om Prakash Saini as a special judge to exclusively undertake the trial of 2G scam.

In a separate notification, the Finance Ministry designated Saini's court as a special court to deal with offences under the Prevention of Money Laundering Act, 2002.

Saini had earlier dealt with the case as a special CBI judge and all the matters connected with the scam including a private complaint filed by Janata Party chief Subramanian Swamy is pending before him.