The Enforcement Directorate (ED) has been slapped a 7,100 crore penalty on Etisalat DB India for violating the Foreign Exchange Management Act (FEMA).
The firm is issued a show cause notice for not reporting funds from abroad to the Reserve Bank of India.
Etisalat DB (earlier Swan Telecom) is a joint venture between UAE?s Etisalat and India?s DB Realty. Licences were issued to offer mobile services in 13 circles in 2008 during the tenure of A Raja.
Etisalat DB chief Shahid Usman Balwa and Director Vinod Goenka along with the minister A Raja are in judicial custody in the 2G scam.
The company is given 30 days to explain why it should not be fined. Both Etisalat and DB Realty refused to make any comments on the issue.
Etisalat bought a 45 per cent stake in Swan Telecom for about Rs 4,150 crore. Presently, Etisalat DB has 6,52,370 subscribers and a market share of 0.17 per cent in the GSM market.
2G Spectrum scam
The 2G spectrum scam in India revolved around issue of 122 licenses to 85 companies, which included many new companies with little or no experience in the telecom sector at a price set in the year 2001.
The main allegations involved under pricing of 2G spectrum that resulted in a heavy loss to the exchequer and the allocation process adopted by the then minister A Raja to favour select companies.
The issue came to light after the auction of spectrum for 3G services. The Comptroller and Auditor General based on the money collected estimated the loss to the exchequer from 2G spectrum sale.
CAG said that the loss is estimated to the tune of Rs 1.76 lakh crore to the government. The Central Bureau of Investigation is probing the matter, while the Supreme Court is monitoring the probe.
Source: Economic Times, The Hindu