2G scam: Reliance denies having substantial equity in Swan

New Delhi, Aug 10 (PTI) Reliance Telecom Ltd, one of the
accused firms in the 2G case, on Wednesday told a Delhi court
that it did not hold substantial equity in Swan Telecom at the
time of grant of spectrum licences.
"No criminal case is made out against Reliance Telecom
Ltd (RTL) as it held only 9.9 per cent equity in Swan Telecom
when the latter was granted spectrum licences," the counsel
for Anil Ambani promoted telecom company told Special CBI
Judge O P Saini.
India's premier investigative agency Central Bureau of
Investigation (CBI), in its charge sheet, alleged that
Reliance Telecom structured Swan Telecom Pvt Ltd (STPL) 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 the Department of Telecom (DoT) had debarred the
CDMA player from entering into GSM telephony sector, it said.
The counsel for RTL denied CBI's allegation that when DoT
allowed use of dual technology, RTL washed its hands off Swan
Telecom.
"So far as the 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," the defence lawyer said.
The guidelines did not prohibit Reliance Telecom from
funding another telecom company, he said, adding the Reliance
group company only held preferential equities in Shahid Balwa
promoted Swan Telecom.
"STPL cannot be held as an associate firm of RTL as the
latter did not have any say in deciding the board members of
STPL," the lawyer said opposing the framing of charges against
the firm.
The CBI, in its first charge sheet, alleged that top
Reliance ADAG officials--Gautam Doshi, Hari Nair and Surendra
Pipara--had conspired with former Telecom Minister A Raja and
others.
"The accused persons structured the holding of Swan in
a manner that only 9.9 per cent equity was held by RTL and
rest 90.1 per cent was shown as held by Tiger Traders Pvt Ltd,
although the entire company was held by the Reliance ADA Group
of companies through the funds raised from RTL," the CBI had
alleged.
RTL and its officials are accused of creating shell firms
like Swan Telecom, Zebra Consultancy Services, Giraffe
Consultancy Private Ltd and Parrot Consultants to create a web
in which no company is a holding firm and the officials are
the real masters, the CBI had alleged.
It had said that after Reliance ADAG applied for 2G
licence through Swan Telecom, it got GSM spectrum in 13
circles under dual technology policy which rendered Swan
Telecom useless for it and prompted it to withdraw its
holding, transferring the shell firm to Shahid Balwa and Vinod
Goenka.
"Accordingly, Reliance ADA Group withdrew its holding
from Swan Telecom and the three accused transferred the
control of Swan Telecom to co-accused Shahid Balwa and Vinod
Goenka in order to facilitate them to cheat the DoT by getting
UAS Licence in the name of Swan Telecom which was till October
18, 2007 ineligible for licence," the probe agency had said.
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