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Hidden links: 2G swindle stain creeps closer to DMK

Who are the real people behind Genex Exim Ventures, a mystery company that suddenly acquired shares worth Rs 380 crore in Swan Telecom? Gaurav Choudhury reports. Links between Swan Telecom and DMK? | Underpricing of 2G spectrum

delhi Updated: Nov 18, 2010 01:32 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times

Who are the real people behind Genex Exim Ventures, a mystery company that suddenly acquired shares worth Rs 380 crore in Swan Telecom?

This is one of the questions being investigated by the CBI, Enforcement Directorate and Income Tax department in the scandal involving underpricing of 2G spectrum allocated by the A Raja-led telecom ministry.

Swan was among the earliest firms granted a licence by Raja.

Under sustained Opposition pressure after a Comptroller and Auditor General report that indicted the manner in which 2G spectrum was sold, Raja quit his position on Sunday night.

Preliminary enquiries by investigators show a network involving major business interests in Tamil Nadu is linked to Swan (renamed Etisalat DB Telecom).

After Genex, owned by businessmen Mohammed Hassan and Ahamed Shakir acquired a stake in Swan, a person representing a large Gulf-based group, ETA Star, joined the board of Swan on behalf of Genex. Curiously, Genex has a paid up capital of just Rs 1 lakh.

This board member, Ahmed Syed Salahuddin, is the son of NRI businessman Syed Mohammed Salahuddin, founder promoter of Dubai-based real estate conglomerate ETA Star Group, which has revenues of over $5 billion (about Rs 23,000 crore).

Genex acquired 5.27% stake in Swan Telecom worth Rs 380 crore, barely two months after it was set up in September 2008.

In December 2009, Etisalat DB, current owners of Swan, applied to the Foreign Investment Promotion Board (FIPB) seeking permission to buy the stake of Genex for Rs 380 crore.

Despite the exploding telecom market, this was exactly the same price at which the firm had initially been allotted the 5.27% stake in the controversial company.

Investigators are now examining the possibility of Genex being a front company of the ETA Group, which has landed a slew of lucrative projects and civil contracts in Tamil Nadu, ruled by the M Karunanidhi-led DMK.

ETA Group is setting up an IT Special Economic Zone in Tamil Nadu at Kancheepuram worth Rs 3,750 crore. The MoU was signed in 2007.

A DMK leader, who did not want to be identified, said: "We do not wish to say anything. Let everything be investigated and proved."

Phone calls by HT to ETA Star Group's office in Dubai went unanswered.

Etisalat DB's corporate communication department did not respond to calls or text messages from HT.

First Published: Nov 18, 2010 00:13 IST