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The 2G scam takes a toll

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The full story of the 2G spectrum allocation scam is a complicated fabric of lies, only one thread of which continues to be investigated and brought to court. That is the nexus between Raja, Swan Telecom, which was backed by DB Realty and allegedly owned by Anil Ambani. A terse item in ET tells how spooked the market is by all these accusations:

Shares of Unitech, DB Realty and Reliance Communications, which are in the midst of 2G scam, today closed lower in the range of 1-2 per cent on the Bombay Stock Exchange (BSE). ADAG [Anil Dhirubhai Ambani Group] company Reliance Communications (RCom) is the holding company of Reliance Telecom which has been named in the charge-sheet filed by CBI in the 2G spectrum scam case.

The WSJ noted the consequent slowdown in the realty market:

One of the most affected industries is likely to be India’s real-estate sector, which also has been racked by scandal. A Mumbai housing project that was meant for war widows was, instead, auctioned off, drawing attention to corruption in the industry.

Then Shahid Balwa, founder of a real-estate company DB Realty, was arrested in relation to a wide-ranging investigation into the government’s 2008 sale of mobile-telephone spectrum. Mr. Balwa also is the founder of one of the companies alleged to have received spectrum at unfairly low prices. Mr. Balwa, who has stepped down as managing director of DB Realty, denies the allegation.

Pujit Aggarwal, managing director of real-estate firm Orbit Corp., says banks have withdrawn their support for the industry.

This opportunity is taken by the notorious Niira Radia to sling some mud at Sharad Pawar. That’s a brilliant move, since Sharad Pawar’s image is such that any mud will stick. RTT News reports:

Corporate lobbyist Niira Radia has told the Central Bureau of Investigation (CBI) that India’s agriculture minister Sharad Pawar may be controlling the controversial DB Realty, according to media reports released on Thursday.

She also claimed Pawar may have pursued the issue of 2G spectrum and licence for Swan Telecom as well as to Anil Ambani-controlled Reliance Communications with former telecom minister A Raja. But Radia added that she had no documentary proof or evidence to back up her allegation.

The report above does not mention that Radia’s firm issued a press statement alleging the connection. Predictably, Pawar issued a denial, as ET reports:

Union Agriculture Minister Sharad Pawar has denied allegations that he controlled or held financial interest in DB Realty, whose promoters Shahid Balwa and Vinod Goenka have been chargesheeted by the Central Bureau of Investigation in the 2G-spectrum allocation case.

The CBI has concentrated on one of the 14 companies who are alleged to have used illegal means to gain 2G spectrum. Now the entry of Radia into the public domain on this issue makes it seem as if the public outrage about this scam will be used to settle scores between the various beneficiaries of a Raja’s largesse.

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Written by Arhopala Bazaloides

April 15, 2011 at 4:24 am

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