ED makes intentions clear, going after telcos

The Enforcement Directorate has sent its investigation teams to tax havens to unearth alleged money laundering by the companies engaged in the mobile telephony in India. Enforcement Director Arun Kumar made this disclosure while deposing before the Joint Parliamentary Committee (JPC) on 2G here on Wednesday. He also gave out the list of ten companies against whom the cases have been filed under the Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA).

These companies are Tata Teleservices, Unitech Wireless, Swan Telecom, Loop Telecom, Estell Ltd, Videocon Telecom, Shyam Telecom, Alliance Infotech, Idea Cellular and Spice Communications Ltd (now merged with Idea Cellular). The JPC, which decided to take a month's summer break to meet again on July 7, was told that the Enforcement Directorate interrogated 52 persons to nail these companies.

The frauds of these companies busted by the directorate include oversees financial transactions by way of FDI (foreign direct investment) through purchase of equity and preferable shares and debentures by non- resident persons. All these firms prima facie violated the FDI ceiling of 49 per cent that requires no government clearance and 74 per cent with the permission of Foreign Investment Promotion Board (FIPB), Arun Kumar disclosed.

Briefing reporters after a day- long busy schedule, JPC chairman P C Chacko said nine former telecom secretaries, including arrested Siddharth Behra, have been summoned to depose before the committee between July 7 and 9. Politicians will be examined after the JPC is finished with these bureaucrats.

Chacko said the JPC is taking a month's break as by that time the CBI would have filed the final chargesheet to help its member MPs to accentuate the probe. CBI chief Amar Singh indicated to the JPC during deposition on Tuesday that the final chargesheet will be filed by June 30.

The officials examined on Wednesday besides the Enforcement Director were Telecom Regulatory Authority (TRAI) Chairman J S Sarma, Central Board of Direct Taxes Chairman Prakash Chandra, Financial Intelligence Unit chief P K Tiwari and Secretaries of the Finance Ministry.

The TRAI Chairman told the JPC that his authority is not sitting idle. It has given 11 reports on the 2G spectrum allocation to the government. He admitted that the New Telecom Policy (NTP) of 1999 and the TRAI Act requires the Department of Telecom (DoT) to seek the regulator's recommendations on terms and conditions of the telecom licences, but these recommendations are not mandatory.

Dr Sarma pointed out in response to a query that the regulatory authority cancelled 74 licences issued between 2006 and 2008 due to non- compliance of obligations. He added that it was TRAI recommendation given on August 20, 2007 not to put cap on any telecom operator in any service area and give additional spectrum to both CDMA and GSM service providers, provided they fulfill obligations.