Had no stakes in Swan during licence allocation

Reliance Telecom tells CBI court Swan Telecom was not its front company

Anil Dhirubhai Ambani Group ADAG company Reliance Telecom Ltd RTL on Wednesday defended itself before the Special CBI court trying the 2G spectrum allocation case by arguing that at the time of allocation of licences,it had no stakes in Swan Telecom.

Iqbal Chagla,counsel for the RTL,told Special CBI judge O P Saini that Swan Telecom Private Ltd was not RTLs front company. RTL initially held 9.9 per cent equity in STPL. However,at the time of grant of licences to STPL,RTL held no equity in STPL and the charge of conspiracy is untenable, he said.

Chagla said Reliance Telecom had sold its preference shares of Swan Telecom to a company belonging to Balwas on October 17,2007,and 9.9 per cent equity shares were also sold to Delphi Investment,another independent company.

The CBI,in its chargesheet,alleged that RTL structured Swan Telecom as its front company to

circumvent the then existing telecom policy which held existing players ineligible for new licences in the same circle.

The Anil Ambani-promoted firm was ineligible to get the spectrum as Department of Telecom had debarred the CDMA player from entering into GSM telephony sector,it said.

Chagla also argued that the Reliance ADAG company did not violate guidelines as its equities were below 10 per cent in the Shahid Balwa-promoted firm. So far as UASL guidelines of DoT are concerned,they only prohibited an existing telecom company from holding shares in excess of 10 per cent in another telecom company. We held 9.9 per cent stake in Swan Telecom and no case is made out against us, he said.

CBI questions Essars Ruia

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Even as the CBI gears up to file a second supplementary chargesheet against Essar-Loop in connection with the 2G scam,the agency on Wednesday questioned Essar Group promoter-director Anshuman Ruia for nearly three hours about the links between Essar and Loop.

CBI confronted Ruia on the minutes of the meetings in which Loop was described as an associate of Essar.

A spokesperson for Essar Group said,Essar is in full compliance with UAS license norms. We have provided all required information to the various agencies and will continue to fully cooperate in an open and transparent manner. The CBI claims Essar Groups Loop Telecom was one of the beneficiaries of A Rajas largesse and was granted licences for 21 circles in January 2008.