2G scam: ED to attach properties of two errant telcos

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 CBI also filed a 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.