As part of the ongoing probe into allegations of wrongdoing and irregularities in allocation of 2G spectrum and licences, the Central Bureau of Investigation has arrested Shahid Balwa, promoter of Swan Telecom and managing director of DB Realty Limited.
Mr. Balwa was placed under arrest on Tuesday night in Mumbai and produced on Wednesday before Special CBI judge S.C. Chandak, who allowed the agency two days' transit remand to take him to Delhi. CBI sources said he would be produced before a court in Patiala House on Thursday.
Investigators are likely to confront Mr. Balwa with the former Telecom Minister A. Raja, who is also in CBI custody. With the arrest of Mr. Balwa, the agency hopes to get fresh leads in tracking the money trail as it suspects that kickbacks would have flowed to persons close to Mr. Raja or his relatives.
DB Realty, promoted by Mr. Balwa, had floated Swan Telecom, which was allegedly helped by Mr. Raja in getting licences for 13 circles, including Mumbai and Delhi, for Rs.1,537 crore. But Swan made a killing by selling 45 per cent of its shares to the UAE-based firm Etisalat for nearly Rs.4,200 crore soon after getting the spectrum.
Mr. Balwa is the fourth person arrested in the 2G spectrum case after Mr. Raja, his former personal secretary R.K. Chandolia, and the former Telecom Secretary Siddharth Behura.
Meanwhile, DB Realty claimed that Mr. Balwa had been “wrongly implicated” in the investigation into the grant of 2G licences. A company statement reiterated that neither Mr. Balwa nor any person/entity forming part of the DB Group had done anything “inappropriate or illegal.” He would contest the proceedings.
But CBI sources claimed that Swan Telecom and Unitech Telecom together caused the exchequer a loss of over Rs.7,000 crore as both companies had offloaded their shares for hefty sums after getting the 2G spectrum.
Focus on Unitech
On a pro-rata basis, the estimated loss for all 122 circles could be more than Rs.22,000 crore, the CBI claimed in its First Information Report, which was produced in court. It said the licences were issued at a very nominal rate, based on the prices fixed in 2001, and that too without competitive bidding.
The sources said the CBI would now turn its focus to officials of Unitech, which bagged the Unified Access Service (UAS) licences between September 2007 and January 2008. The company was given UAS licences for 22 circles for Rs.1,658 crore.
“It offloaded its 60 per cent of shares in the licences to Telenor of Norway for Rs.6,100 crore even before the rollout,” the CBI alleged in the FIR, adding the estimated loss to the government by grant of licences to these two companies alone came to Rs.7,105 crore.
‘Wrongful loss/gain’
Vinaya Deshpande reports from Mumbai:
The CBI's FIR (a copy of which is with TheHindu) stated: “Certain officials of the Department of Telecommunications entered into a criminal conspiracy with certain private persons/companies and misused their official position in the grant of UAS licences, causing a wrongful loss to the government and corresponding wrongful gain to those private persons/companies.”
The applications of other companies were rejected without any valid reason, the FIR said.
The Sections invoked in the FIR are 120 B of the IPC read with 13(2) and 13(1)(d) of the Prevention of Corruption Act, 1988.
