2G scam: ED to attach properties of 2 telcos

New Delhi, Apr 27 (PTI) In more trouble for telecom
companies involved in the 2G spectrum scam, the Enforcement
Directorate on Wednesday told the Supreme Court that
properties worth Rs 2,000 crore each of two firms will be
attached soon.
"Property worth Rs 2,000 crore each has to be
attached relating to these companies," senior advocate K K
Venugopal, appearing for the ED, submitted before a bench
comprising justices G S Singhvi and A K Ganguly.
Venugopal, who was reading the excerpts of the fresh
status report of the ED submitted in a sealed cover, did not
mention the names of the companies but assured that attachment
proceedings will be initiated soon and will be completed
within two months.
The bench meanwhile termed as "flabbergasting" the
magnitude of money transactions in the 2G scam.
The scam, which, according to CAG estimates runs into
Rs 1.76 lakh crore, left the bench perplexed as they perused
the ED report giving details of illegal transaction of
thousands of crores by the errant telecom companies.
"We are not familiar with such figures," the bench
said, adding that investigating officers who are probing the
case must also be surprised with the amount involved in the
scam.
"Gradually, figures are getting multiplied. Officers
must also be flabbergasted by these figures," the bench said
after going through the report.
The bench said "ultimately retrospection has to be done
by people themselves."
Venugopal hinted that attachment orders will be issued
shortly under the Prevention of Money Laundering Act (PMLA)
and Foreign Exchange Management Act (FEMA), against the two
companies against whom the ED has so far registered the
complaints.
"It will be done in two months time against the
companies whose names have been mentioned in the complaints.
We have to collect details of their properties as many of the
companies keep benami properties," the senior advocate said
when the bench asked how much time will the ED take to
complete the investigation.
The ED in its status report said investigation was in
progress regarding the involvement of five foreign companies
in the 2G scam which are registered in Virgin Island.
On hearing this, the bench asked "what is the response
of the CBI on it?"
Venugopal said till now the ED has not written about
it to the RBI and future course of investigation will follow.
However, he said action has been taken and complaint
has been registered for FEMA violation of Rs 4,000 crore which
will be added on as the investigation will progress and
attachment will start.
The ED while giving details of various financial
transactions connected with the scam said that the company
linked with Shahid Usman Balwa's D B Realty was involved in
the movement of Rs 1,400 crore.
"The companies are connected with D B Realty. Funds
started moving from a real estate company. Rs 1,400 crore went
from the top to the bottom and goes back to the original
source," Venugopal said referring to the transaction of money
among various companies after the grant of 2G licence.
Meanwhile, the Central Bureau of Investigation (CBI)
also filed fresh status report about its probe and sought more
time to complete the investigation relating to the allocation
of spectrum during 2001-07.
The bench appreciated the probe done by the CBI and ED
and said they have done a "commendable job".
The ED in its complaint registered on April 9 had
charged Swan Telecom with committing FEMA contraventions to
the tune of Rs 3,608 crore.
It said that Swan Telecom 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.
The ED had 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".
CBI told the court that during the investigation it
has become clear that rules were circumvented and huge amount
by way bribery exchanged in the allocation of 2G spectrum.
It said that top officials of the telecom companies
including their managing directors and share holders were
"directly" involved in bribery.
While perusing the CBI's status report, the bench
observed that there were some "revealing" information in it
relating to a particular company whose officials are likely to
be named in the chargesheet.
Advocate Prashant Bhushan, appearing for the NGO,
Centre for Public Interest Litigation, on whose petition CBI
probe was ordered in the 2G scam, said the agency in its first
chargesheet named Swan Telecom and Reliance Telecom as
accused in the case along with three top officers of later.
However, he said that CBI has not named Reliance
Telecom's chairman Anil Ambani as an accused who has 50 per
cent share in the company.
However, the Bench said, "This is for the special
court (exclusively dealing with the 2G case) to consider."
Bhushan said CBI officers are doing a difficult job
under tremendous pressure and "big fish" are not apprehended.
He said Swan Telecom was financed by the Reliance and
the person who benefits is having 50 per cent share and is the
chairman of the company.
Further, he said that Swan Telecom was financed by
Reliance Telecom itself which was ineligible for 2G licence.
The Bench said since there is a special court to deal
with other such issues and senior advocate U U Lalit has been
appointed as special prosecutor in the case "there is a strong
safeguard".
"We have gone through the progress of the
investigation and officers of the CBI has done commendable job
despite several constraints relating to resource, manpower and
time constraint," the bench said.