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Tata faces questions in telecoms graft probe
Indian tycoon among those facing parliamentary questioning over multi-billion-dollar telecom licensing scam.
Last Modified: 04 Apr 2011 20:14

Tata, ranked 61st on Forbes most powerful people list, has denied his firm received any undue benefits [GALLO/GETTY]

Iconic Indian tycoon Ratan Tata has appeared before a parliamentary panel probing a multi-billion dollar telecom graft scandal.

Ratan Tata, chief of the Tata group, arrived on Monday morning along with Anil Ambani, who heads Reliance ADA, for questioning over the allegedly fraudulent distribution of licences in 2008 to top telecom firms, an official told the AFP news agency.

Tata, 73, answered questions including those related to the allocation of radio frequencies, but declined to make any comment to reporters as he emerged from the three-hour hearing at the parliament house. 

The head of the Public Accounts Committee (PAC), a permanent body comprising lawmakers and retired judges which is leading one of a number of investigations into the scam, said Tata was forthcoming in his answers to the panel. 

Neither Tata nor his company have been charged and he denies his company received any undue benefits

Tata's company, Tata Teleservices, was one of the victims of the opaque licensing process according to a police charge sheet, which claims that Andimuthu Raja, the former telecom minister, took bribes to favour other companies.

However, an independent lawmaker has alleged that Tata Teleservices gained from a 2007 policy change in the manner radio spectrum was granted.

The questioning of two of India's top business tycoons comes two days after police made the first indictments in the case, naming a former federal minister, a unit of Reliance ADA group and the Indian partners of telecoms companies Etisalat and Telenor among the accused.

Apart from the PAC, the scandal is also being investigated by a special cross-party parliamentary committee.

Shares fall

The graft scandal has damaged confidence in the Congress-led coalition government and led to calls for the resignation of Manmohan Singh, the prime minister.

Investors in Asia's third-largest economy have been rattled by the scam in which India may have lost as much as $39bn due to violations of rules when lucrative mobile phone licences and radio spectrum were granted in 2008, the state auditor estimated.

The sum is equivalent to the country's defence budget.

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

A dispute between the government and opposition over the choice of a probe panel paralysed parliamentary proceedings for weeks late last year, until Singh caved in to the demands of his political opponents.

Shares in Reliance Communications, DB Realty and Unitech, whose units were charged on Saturday, all fell on Monday morning, lagging a broader market that was in positive territory.

Raja, the telecoms minister during the licence allocations, was forced to resign and has been arrested. He was charged on Saturday with abuse of official position, cheating and criminal conspiracy.

Tata had earlier backed Raja and the policy changes he made, saying they "broke the powerful cartel which had been holding back competition".

Source:
Agencies
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