No licence norm violation with Swan stake: RCom

Under the scanner for its alleged association with Swan Telecom, Anil Ambani group firm Reliance Communications today said it only held 9.9 per cent equity share capital in the firm at the time of applying for 2G licences and asserted that it did not violate any norms.

The company also said it was in full compliance with all applicable DoT regulations.

Reliance Telecom held only 9.9 per cent of the equity share capital of Swan Telecom at the time of filing the relevant licence application in March, 2007, the Reliance Communications Wireless Business CEO, Mr Syed Safawi, said in a statement.

This shareholding was fully disclosed at inception and this information has always been in the public domain, he added.

The company's statement comes within days of the CBI questioning officials of ADAG firms in relation to 2G spectrum allotment in 2008 by former Telecom Minister Mr A. Raja.

CAG had also alleged that Swan Telecom acted as front for ADAG to get licence and spectrum in several circles. Swan Telecom later inducted foreign partner Etisalat, which acquired a 45 per cent stake by way of fresh equity for about $900 million.

“Neither Reliance Telecom, nor RCom, nor any Reliance ADA Group individual, company or affiliate is a beneficiary of, or has any connection with, any of the licences issued, or spectrum granted to old and new 2G operators in January, 2008,” Mr Safawi said.

Dual tech licences

With regard to issuance of dual technology licences by Mr Raja to Reliance Communications, the Group said its application that had been pending from February, 2006, for more than 18 months, was on identical terms and involved the payment of identical fees as three other companies — the Tata group's Tata Teleservices, Himachal Futuristic Communications and Shyam Telecom (now known as Sistema) — and there is nothing special or untoward in the same.

The grant of dual technology approval to RCom, Tata Teleservices and the two other companies was after due process of public consultation by TRAI, recommendations by TRAI to DoT and acceptance of the same by the DoT/Government of India,” Mr Safawi said.

The grant of dual technology approval to RCom in October, 2007, has been upheld by the Delhi High Court by a judgment in August, 2008, and by the Telecom Tribunal, TDSAT, by an order in March, 2009.

The CAG had pointed out that the DoT favoured RCom in jumping the queue for grant of GSM spectrum ahead of others.

CBI investigation not specific to RCom

Over the past several weeks, as part of investigations pursuant to the Supreme Court's orders, the CBI is reportedly examining a large number of telecom firms and their officials, from across the entire telecom industry in relation to various matters for the years 2001 to 2008.

“ ... The investigations by CBI and other authorities are by no means specific to RCom executives and instead, have already reportedly covered more than 50 people from across a large number of telecom operators,” Mr Safawi added.

As part of this process, CBI is continuing its examination of certain employees of Reliance ADA Group, as well as all other telecom operators, who were handling these matters at the relevant time.

“Mr Hari Nair of our group was Company Secretary of Swan Telecom for a few months while Reliance Telecom held a 9.9 per cent equity stake in that company, but that shareholding was sold and he ceased to hold that post, well before a licence was granted to Swan Telecom in January, 2008,” RCom clarified.

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