ID :
174279
Sat, 04/09/2011 - 21:36
Auther :
Shortlink :
https://oananews.org//node/174279
The shortlink copeid
ED slaps FEMA charges against top telecom firms
New Delhi, Apr 9 (PTI) The Enforcement Directorate
Saturday slapped various charges of FEMA violations to the
tune of over Rs 4,300 crore against top telecom firms
allegedly involved in the 2G spectrum scam including Swan,
Loop and S-Tel.
The Directorate in its complaint filed before the
Competent Adjudicating Authority for FEMA(Foreign Exchange
Management Act) violations said it is also probing "suspected
contravention" of forex rules in Virgin Mobile, a joint
venture of Tata group.
The Adjudicating Authority in this case is a Special
Director rank officer of the ED.
The ED, India's law enforcement and economic
intelligence agency, has charged Shahid Balwa-promoted Swan
Telecom, with committing FEMA contraventions to the tune of Rs
3,608 crore.
"This contravention was done by the company in issuing
shares to foreign investor and resident investor under an
agreement and had issued shares to foreign investor on an
abnormal value to avoid the permission of FIPB (Foreign
Investment Promotion Board), Government of India," the ED said
in its complaint against Swan Telecom.
Swan Telecom Pvt Ltd issued 44.73 per cent shares to
Dubai-based Etisalat and 5.27 per cent shares to Genex Exim as
per agreement on September 23, 2009.
Swan Telecom while issuing shares to foreign investor
under the agreement also allegedly contravened the provisions
of the laid down rules prescribed by the Commerce and Industry
Ministry by appointing a Director who had been nominated by
Dubai-based Etisalat and arrangement of a steering committee
having members of their foreign partner for functioning of
Swan Telecom.
The ED also alleged that Swan Telecom had disclosed
that issue of equity to Genex Exim was under resident category
but during investigations it was found that "it was an
indirect foreign investment in Swan because funds into Genex
were brought from Dubai."
"Thus issue of equity on December 17, 2008 by Swan to
Etisalat and Genex totalling 50 per cent under automatic route
was in contravention" of various sections of FEMA "for the
amount of Rs 3,608 crore", the ED alleged.
In the case of Loop Mobile India Limited based in
Mumbai, the ED alleged FEMA contravention to a total amount of
Rs 431 crore.
"These contraventions are done by the said company in
not reporting the receipt of funds from abroad within the
stipulated period of time to Reserve Bank of India, in not
reporting issue of shares to foreign investor within
stipulated period of time and in purchasing shares of an
Indian company from the funds of Foreign Direct Investment,"
ED said in its complaint against the firm.
"The Directorate has also come across suspected
contravention in Virgin Mobile (Tata group) and is analysing
the pricing issue of shares between Unitech and Telenor," the
ED said.
In its complaint against Loop Telecom, the ED has
charged the firm with forex violations to the tune of Rs
184.28 crore.
"These contraventions are done by the said company in
not reporting the receipt of funds from abroad within the
stipulated period of time to RBI and in not reporting issue of
shares to foreign investor within stipulated period of time,"
the ED said.
The least amount of FEMA contravention was found to be
at Rs 96.60 lakh against S-Tel Private Limited based in
Gurgaon after the ED investigation.
"This contravention is done by the said company in not
refunding the balance of the FDI to foreign investor within
stipulated period of time," the ED said in its submission
against the firm.
The Directorate charged Chennai based Wellcom
Communications India and Wellcom Communications for a total
amount of Rs 11.87 crore in forex violations.
"These contraventions are done by the said company in
not reporting the receipt of funds from abroad within
stipulated period of time to RBI and in not refunding the
balance of the FDI to foreign investor within stipulated
period of time," the ED said in its complaint against the
firm.
The Directorate is zeroing on the transactions made by
these companies with legal entities based outside India to
find out whether any guarantee/counter guarantee were given to
obtain funds from abroad and the first source from where they
originated, the ED said.
The ED, according to its submission, is also probing
the source of funds, ownership of the companies based in
foreign shores and end-use of foreign funds.
"For this (probe of sources of funds and ownership)
letters have been issued to the source abroad based in 12
countries and Letters of Request have been sent to five
countries for investigation outside India," the ED said.
Other aspects of the forex violations probe by the ED
include "cash guarantee issue of Sistema" and the "issue of
merger of companies after issue of licences."
According to ED sources, the penalty in such cases of
FEMA contravention is usually three times of the amount
involved.
The ED also submitted that its other angle of probe in
the 2G spectrum allocation scam-- under anti-money laundering
provisions-- are underway.
"Investigation under PMLA 2002, is under progress.
Action would be taken against individuals and companies who
have figured in the chargesheet filed by the CBI," the ED
said.
"We have not been able to confirm specific details in
the chargesheet yet. Telenor Group invested Rs 61.2 billion
over four tranches in a 100 per cent transparent manner. Since
Telenor Group increased its ownership in Unitech Wireless at
each stage,the Indian authorities were informed about each
investment. Telenor Group also announced each investment to
media.
"Our investments have gone into the Joint Venture
company and not to Unitech Limited to result in any windfall
gains. These are the funds with which Uninor was started and
developed into a 25 million subscriber operation today. Beyond
this, we will be able to respond once we know what the
specific charge is," Director of Communications, Telenor
Group, Glenn Mandelid said in his reaction.
"We have not received a copy of or are aware of the
charge sheet filed by Enforcement Directorate and hence
unable to comment on the same," a Swan telecom spokesperson
said.
A Loop Telecom spokesperson said, "we are unaware of
any such matter and therefore are unable to comment on the
same."
Saturday slapped various charges of FEMA violations to the
tune of over Rs 4,300 crore against top telecom firms
allegedly involved in the 2G spectrum scam including Swan,
Loop and S-Tel.
The Directorate in its complaint filed before the
Competent Adjudicating Authority for FEMA(Foreign Exchange
Management Act) violations said it is also probing "suspected
contravention" of forex rules in Virgin Mobile, a joint
venture of Tata group.
The Adjudicating Authority in this case is a Special
Director rank officer of the ED.
The ED, India's law enforcement and economic
intelligence agency, has charged Shahid Balwa-promoted Swan
Telecom, with committing FEMA contraventions to the tune of Rs
3,608 crore.
"This contravention was done by the company in issuing
shares to foreign investor and resident investor under an
agreement and had issued shares to foreign investor on an
abnormal value to avoid the permission of FIPB (Foreign
Investment Promotion Board), Government of India," the ED said
in its complaint against Swan Telecom.
Swan Telecom Pvt Ltd issued 44.73 per cent shares to
Dubai-based Etisalat and 5.27 per cent shares to Genex Exim as
per agreement on September 23, 2009.
Swan Telecom while issuing shares to foreign investor
under the agreement also allegedly contravened the provisions
of the laid down rules prescribed by the Commerce and Industry
Ministry by appointing a Director who had been nominated by
Dubai-based Etisalat and arrangement of a steering committee
having members of their foreign partner for functioning of
Swan Telecom.
The ED also alleged that Swan Telecom had disclosed
that issue of equity to Genex Exim was under resident category
but during investigations it was found that "it was an
indirect foreign investment in Swan because funds into Genex
were brought from Dubai."
"Thus issue of equity on December 17, 2008 by Swan to
Etisalat and Genex totalling 50 per cent under automatic route
was in contravention" of various sections of FEMA "for the
amount of Rs 3,608 crore", the ED alleged.
In the case of Loop Mobile India Limited based in
Mumbai, the ED alleged FEMA contravention to a total amount of
Rs 431 crore.
"These contraventions are done by the said company in
not reporting the receipt of funds from abroad within the
stipulated period of time to Reserve Bank of India, in not
reporting issue of shares to foreign investor within
stipulated period of time and in purchasing shares of an
Indian company from the funds of Foreign Direct Investment,"
ED said in its complaint against the firm.
"The Directorate has also come across suspected
contravention in Virgin Mobile (Tata group) and is analysing
the pricing issue of shares between Unitech and Telenor," the
ED said.
In its complaint against Loop Telecom, the ED has
charged the firm with forex violations to the tune of Rs
184.28 crore.
"These contraventions are done by the said company in
not reporting the receipt of funds from abroad within the
stipulated period of time to RBI and in not reporting issue of
shares to foreign investor within stipulated period of time,"
the ED said.
The least amount of FEMA contravention was found to be
at Rs 96.60 lakh against S-Tel Private Limited based in
Gurgaon after the ED investigation.
"This contravention is done by the said company in not
refunding the balance of the FDI to foreign investor within
stipulated period of time," the ED said in its submission
against the firm.
The Directorate charged Chennai based Wellcom
Communications India and Wellcom Communications for a total
amount of Rs 11.87 crore in forex violations.
"These contraventions are done by the said company in
not reporting the receipt of funds from abroad within
stipulated period of time to RBI and in not refunding the
balance of the FDI to foreign investor within stipulated
period of time," the ED said in its complaint against the
firm.
The Directorate is zeroing on the transactions made by
these companies with legal entities based outside India to
find out whether any guarantee/counter guarantee were given to
obtain funds from abroad and the first source from where they
originated, the ED said.
The ED, according to its submission, is also probing
the source of funds, ownership of the companies based in
foreign shores and end-use of foreign funds.
"For this (probe of sources of funds and ownership)
letters have been issued to the source abroad based in 12
countries and Letters of Request have been sent to five
countries for investigation outside India," the ED said.
Other aspects of the forex violations probe by the ED
include "cash guarantee issue of Sistema" and the "issue of
merger of companies after issue of licences."
According to ED sources, the penalty in such cases of
FEMA contravention is usually three times of the amount
involved.
The ED also submitted that its other angle of probe in
the 2G spectrum allocation scam-- under anti-money laundering
provisions-- are underway.
"Investigation under PMLA 2002, is under progress.
Action would be taken against individuals and companies who
have figured in the chargesheet filed by the CBI," the ED
said.
"We have not been able to confirm specific details in
the chargesheet yet. Telenor Group invested Rs 61.2 billion
over four tranches in a 100 per cent transparent manner. Since
Telenor Group increased its ownership in Unitech Wireless at
each stage,the Indian authorities were informed about each
investment. Telenor Group also announced each investment to
media.
"Our investments have gone into the Joint Venture
company and not to Unitech Limited to result in any windfall
gains. These are the funds with which Uninor was started and
developed into a 25 million subscriber operation today. Beyond
this, we will be able to respond once we know what the
specific charge is," Director of Communications, Telenor
Group, Glenn Mandelid said in his reaction.
"We have not received a copy of or are aware of the
charge sheet filed by Enforcement Directorate and hence
unable to comment on the same," a Swan telecom spokesperson
said.
A Loop Telecom spokesperson said, "we are unaware of
any such matter and therefore are unable to comment on the
same."
