NEW DELHI, April 5 (Reuters) - Anil Ambani, the chairman of India's Reliance ADA group, appeared on Tuesday before a parliamentary panel investigating a multi-billion dollar telecoms graft scandal that has rocked the country's political and business establishment.
Ambani testified days after police indicted officials and a unit of his group for conspiracy, cheating and other offences during a flawed 2007-08 telecoms licence grant process that may have cost the state up to $39 billion in lost revenue.
“Anil Ambani requested that he (should) not be asked anything which could be used against him in the court case,” the panel chairman, Murli Manohar Joshi, said at the end of a day that saw several industry executives testify behind closed doors.
Joshi, however, described the billionaire as “candid,” and said Ambani had promised to follow up on questions to which he did not have immediate answers.
The scandal is the largest of several corruption cases to have emerged in Prime Minister Manmohan Singh's second term. It has badly damaged the government's credibility and set off worries about regulatory risk in Asia's third-largest economy.
While Ambani did not speak to reporters gathered inside the colonial-era parliament building after his appearance, the spectacle of some of India's biggest business names being questioned is almost unheard of in a country where leading industrialists have long been seen as untouchable.
The Wharton-educated Ambani, whose ranking on the recent Forbes global rich list fell to 103 from 36th a year earlier, appeared a day after tycoon Ratan Tata was questioned by the same Public Accounts Committee.
Police accuse Reliance Telecom, a unit of Reliance Communications , and three Reliance ADA officials, of conspiring to set up Swan Telecom as a front company to gain valuable radio spectrum. Indian rules bar an existing licence holder from owning more than 10 % in another operator in the same market.
The committee's recommendations are not binding on the government but its proceeding could have broader effects.
“This investigation has caused corporate India to sit up and take notice of the fact that there are law enforcement agencies in the country who are minded to ask tough questions if things get out of hand,” said Saurabh Mukherjea, head of equities at Mumbai-based Ambit Capital. “Even if the investigation comes to nothing from this point in, just the fact that we've seen our authorities being willing to ask India Inc tough questions will exert a degree of discipline on corporate behavior going forward.”
The parliamentary committee scrutinises government accounts and is headed by Joshi, lawmaker from the main opposition Bharatiya Janata Party (BJP).
The panel also heard testimony on Tuesday from Sigve Brekke, the head of Telenor in Asia who is also in charge of the Norwegian telecom firm's Indian unit; Sanjay Chandra, managing director of Telenor's partner Unitech; and Atul Jhamb, the chief executive of the UAE Etisalat's Indian joint venture.
Panel chairman Joshi said there were discrepancies between what was heard by the panel on Tuesday and what was included in a state auditor's report on irregularities and losses due to the flawed licencing process, but he did not give specifics.
Joshi did not reveal what questions were asked, but earlier two members of the committee told reporters that Ambani was questioned during his hour-long appearance over grants of radio spectrum.
Police on Saturday charged former telecoms minister Andimuthu Raja, Chandra, three officials and a unit of Reliance ADA group, and the Indian joint venture partners of Telenor and Etisalat in the case. All the accused have denied any wrongdoing.
Etisalat and Telenor have said the events described in the charges occurred before they started doing business in India.
The telecoms ministry is considering whether to cancel several licences issued in 2008, potentially jeopardising billions of dollars in investment that operators have made in the world's second-largest mobile market by users.
Such worries prompted the Norwegian prime minister to write to Singh seeking “fair treatment” for Telenor. The corruption charges have weighed on the stock market, with the benchmark Mumbai index ending the March quarter as the world's worst performer. The scandal saw the main opposition BJP all but shut down an entire session of parliament demanding a special cross-party panel investigate the charges.
The government agreed to the demand, and that panel is carrying out parallel hearings. The Supreme Court, which is monitoring the police investigation, had reprimanded Singh for not acting quickly enough against the telecoms minister and had ordered police to go after the rich and powerful involved in the case. “We have a large number of people who think themselves to be above the law. You must catch all of them. Merely because a person is in the Forbes list of millionaires and billionaires does not matter,” the court said in February. |
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