Anil Ambani to appear before PAC in telecoms graft probe | delhi | Hindustan Times
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Anil Ambani to appear before PAC in telecoms graft probe

delhi Updated: Apr 05, 2011 11:36 IST

Anil Ambani, chairman of Reliance ADA group, will appear on Tuesday to answer a parliamentary panel investigating the 2G scam that has rocked the country's political and business establishment.

Ambani's testimony comes days after police indicted officials and a unit of his group for conspiracy, cheating and other offences during a flawed 2008 telecoms licence grant process that may have lost India up to $39 billion in revenue.

The scandal is the largest of the many corruption cases to have emerged in Prime Minister Manmohan Singh's second term. It has badly damaged the government's credibility.

Reliance Telecom, a unit of Reliance Communications, and three Reliance ADA officials are accused by police of conspiring to set up Swan Telecom as a front company to gain valuable radio spectrum. Indian rules prohibit an existing licence holder from owning more than 10 percent in another operator in the same market.

Ambani, one of India's highest profile businessmen, was to be questioned a day after tycoon Ratan Tata appeared before the same Public Accounts Committee.

While the committee's recommendations are not binding on the government, the spectacle of some India's biggest business names being questioned is almost unheard of in a country where leading tycoons have long been seen as untouchable.

"It is very significant that important corporate captains are being asked to explain their role," political analyst Paranjoy Guha Thakurta said.

"Whether it is going to lead to a very significant and dramatic change in the way that it shifts the nexus between big business and politics is an altogether different question."

The parliament committee, which scrutinises government accounts, is headed by Murli Manohar Joshi, an independent minded lawmaker from the main opposition Bharatiya Janata Party (BJP).

Police on Saturday charged former telecoms minister Andimuthu Raja, three officials and a unit of Reliance ADA group and the Indian joint venture partners of Norway's Telenor and of UAE's 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 made entered India.

The telecoms ministry is considering whether to cancel several licences issued during that period, 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 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 Bharatiya Janata Party (BJP) all-but shutting 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 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.