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India charges ex-minister in telecom graft case

New Delhi, April 2, 2011

Indian police on Saturday charged a former minister, Reliance ADA group and the Indian joint venture partners of Telenor and of Etisalat , in a multi-billion dollar telecoms licencing corruption scandal that has rocked the government and business establishments.

Police indicted Andimuthu Raja, the telecoms minister at the time of a flawed 2008 mobile phone licence allocation process, the managing director of Telenor's India partner Unitech, the vice chairman of Etisalat's Indian joint venture and three officials of Reliance ADA group .

'The charges are conspiracy, cheating, forgery of documents, abuse of official position and abetment,' AK Singh, special public prosecutor told reporters after the charges were filed in court. Not all of the accused face all five charges.

The graft scandal, potentially India's largest ever, has damaged confidence in the Congress-led coalition government, led to calls for the resignation of Prime Minister Manmohan Singh, and worried investors in Asia's third-largest economy.

It is one of the several corruption scandals that have emerged during Singh's second term, hobbling policymaking and diverting the government's attention away from pushing forward crucial economic reforms.

Some of India's leading businesses have been questioned and past official decisions scrutinised or reversed. These events have weighed on stocks, with the Mumbai market ending the March quarter as the world's worst performer.

India may have lost as much as $39 billion due to violations of rules when lucrative mobile phone licences and radio spectrum were granted in 2008, the state auditor estimated, a sum equivalent to the country's defence budget.

Raja was forced to resign and later arrested over the auditor's report. He has been accused in court earlier of taking bribes from two firms which are now part of the India operations of Etisalat and of Telenor.

Others arrested include Shahid Balwa, the vice chairman of Etisalat's Indian venture, and two former government officials, who were also charged on Saturday.

The Reliance ADA officials accused are Gautam Doshi, a group managing director, and senior vice presidents Hari Nair and Surendra Pipara. All of the accused were ordered to appear in court on April 13.

Police have earlier questioned Anil Ambani, the billionaire chairman of Reliance ADA group and Prashant Ruia, the chief executive of steel-to-telecoms conglomerate Essar group.

A parliamentary panel probing the scandal has summoned iconic business tycoon Ratan Tata and Anil Ambani for questioning next week. All of the accused have denied any wrongdoing.

The telecoms ministry is considering whether to cancel several licences, after the auditor's report accused these firms of not being eligible for them, sparking off worries about regulatory stability.

The Supreme Court, under its tough new chief justice, has been monitoring the progress of the case after having reprimanded Singh for not moving quick enough to act against his minister.

Faced with a resurgent opposition, Singh's government has not been able to undertake economic reforms such as freeing up diesel prices and allowing foreign investors into the supermarket sector.

The corruption scandals, which include charges of graft at the 2010 Commonwealth Games and of officials at state-run banks taking bribes for corporate loans, have tarnished Singh's image as a clean and effective leader.

They could also affect the performance of the ruling Congress party in five state elections that begin in mid-April, in which the Congress must perform well or risk the coalition unravelling.-Reuters




Tags: telecom graft | Indian minister |

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