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Rs 3 share for Rs 106 cr: ED lists money trail

Rs 3 share for Rs 106 cr: ED lists money trail

Author: Krishnadas Rajagopal
Publication: The Indian Express
Date: March 30, 2011
URL: http://www.indianexpress.com/story-print/768931/

Allotment of one share worth Rs 3 for a whopping Rs 106.95 crore, Rs 3.33 crore largesse to a "family doctor", a "land bank" worth Rs 35 crore are certain instances the Enforcement Directorate's status report listed out today in the Supreme Court to show the money trail in the 2G spectrum scam even as the CBI is gearing up to file a 80,000-page chargesheet on April 2.

The ED report says the payments, mostly from "fixed sources or destinations abroad", in the form of FDI are in fact quid pro quo for favours done by former telecom minister A Raja disguised as loan transactions.

"Huge amounts were brought in through FDI bypassing RBI guidelines. These transactions are after September 2008, after the licences (2G) were issued. We have also found that excess money has been acquired through benami transactions," senior advocate K K Venugopal, representing both ED and CBI, submitted before a Bench of Justices G S Singhvi and A K Ganguly.

"Etisalat received Rs 106.95 crore as foreign investment for which one share was allotted. The face value of the share was Rs 3 and its market value Rs 270," he submitted, adding that the ED has also traced a Rs 3,258 crore transaction and another six exchanges sourced from Dubai which have violated Foreign Investment Promotion Board guidelines.

But the hitch, Venugopal explained, was that FDI up to 50 per cent is allowed and above that only attracts a penalty under FEMA. So, he said the ED is looking into whether any of the transactions attract charges of money laundering.

The ED sent two requests on February 4 and March 18 to RBI for information regarding the overseas transactions, and the bank replied on March 21 seeking time. The agencies have also roped in the Financial Intelligence Unit for tracing some money transactions.

"Meanwhile, a joint team of the CBI and ED is following the money trail to Mauritius to put pressure on the government to divulge the sources of the transaction.... Diplomatic channels have been opened to help probes involving foreign countries," Venugopal said.

In a second status report by the CBI, Venugopal said the agency has completed transcribing the Radia tapes and they would be used as evidence in the trial.

The CBI said the main chargesheet would involve charges of cheating, forgery and corruption, and would arraign five persons, including Raja, and two firms.

It mentioned about Swan as a "front" company even as the court enquired why it did not conduct custodial interrogation of some persons who were only summoned. Venugopal said agency usually does not opt for custodial interrogation when it has sufficient evidence.

The court directed the CBI and the government to respond on April1 to an application filed by advocate Prashant Bhushan seeking transfer of the probe into the death of Raja aide Sadhick Batcha from the Tamil Nadu police to the CBI.

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