Notice to Etisalat on Fema violation

The Enforcement Directorate (ED) has alleged that the 2G scam tainted Etisalat DB and its directors committed violations to the tune of Rs 7,100 crore under the foreign exchange management act (Fema). ED special director Balesh Kumar has in a show-cause notice sought reply from the company and its directors within the next 30 days in the matter.

The Enforcement Directorate (ED) has alleged that the 2G scam tainted Etisalat DB and its directors committed violations to the tune of Rs 7,100 crore under the foreign exchange management act (Fema). ED special director Balesh Kumar has in a show-cause notice sought reply from the company and its directors within the next 30 days in the matter.

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ED assistant director Rajeshwar Singh had filed a complaint in this regard before Kumar, who is the adjudicating authority in the matter. Under Fema, the adjudicating officer can impose a penalty on the offender company and its directors three times the amount for which the show-cause notice is issued.

Singh in his complaint had alleged that Swan Telecom (now Etisalat DB) had issued 44.73% shares to Etisalat, Mauritius under foreign investor category at an abnormal value to avoid taking permission from the foreign investment promotion board. It was also alleged

that Swan appointed a director nominated by Estislat, Dubai and made an arrangement to form a steering committee with members from the same company for functioning of Swan Telecom. This was in violation of norms issued by secretariat for industrial assistance of the ministry of commerce and industry.