Author: PNS
Publication: The Pioneer
Date: March 5, 2011
URL: http://www.dailypioneer.com/321624/SC-security-stinker-to-ring--death-knell-for-Etisalat.html
The 2G spectrum allotment to Swan Telecom,
currently known as Etisalat DB Telecom, headed by jailed Shahid Balwa, has
serious ramifications for national security. On Wednesday, the Supreme Court
sought response from the Centre on the Home Ministry's objections on Balwa's
association in the telecom venture.
The court took serious view of the matter
when petitioner Subramanian Swamy presented the minutes of the meeting of
the Foreign Investment Promotion Board (FIPB), rejecting the application of
the UAE-based promoters of the Etisalat for enhancing their stake in the Indian
entity-Etisalat DB Telecom. The FIPB's decision was based on Home Ministry's
objections.
"Shahid Balwa should not be associated
with the company either as director or in any other capacity….This is
the first case in which MHA (Ministry of Home Affairs) has objected for Indian
director in the company," said the minutes, rejecting Balwa-led Etisalat
DB Telecom's application for enhancing the foreign equity by purchasing the
Salahuddin linked company.
According to the FIPB, the MHA also objected
to the deal due to the presence of Etisalat in Pakistan and Afghanistan and
its strategic alliance with Huawei, controlled by the Chinese army. Etisalat
also has controlling stake in Pakistan Tele Communication, believed to be
in ISI hands.
The Supreme Court granted permission to Subramanian
Swamy to bring on record the damning report submitted by the Home Ministry
against Etisalat DB Telecom Limited. Swamy pointed out that Balwa has challenged
the MHA finding against Etisalat before the Delhi High Court.
Wondering whether the Government had anything
to protect in this case, Swamy said, "If S Tel licence can be cancelled
in the name of national security, why not this." The Supreme Court asked
the Centre to respond on this document and asked Etisalat counsel senior advocate
Harish Salve to explain the facts.
Salve said, "The initial investment came
through FDI. Those facts are on record. I believe further investment required
FIPB's clearance, there was some objection raised by the Government, but that
applied to Balwa against which he has filed a petition in HC." The court
posted the matter for Thursday seeking response of the parties in the case,
including Attorney General GE Vahanvati, who will address arguments on behalf
of Centre.
Etisalat DB Telecom came into existence after
Swan Telecom divested 45 per cent share to the UAE's Etisalat. Later, Swan
Telecom changed its name to Etisalat DB Telecom.
In 2010, the UAE-based Etisalat had approached
the FIPB for approval to acquire 5.27 per cent of the shares of Swan telecom,
held by NRI tycoon Sayeed Salahuddin, a friend of Tamil Nadu Chief Minister
M Karunanidhi. Salahuddin owned the share through a small company called Genex
Exim.
Balwa had divested his stakes in Swan to Salahuddin
and Etisalat in September 2008, coinciding with major irregularities in spectrum
allotment.
Sources said that the 5.27 per cent share
to Salahuddin was believed to be a kickback in the Spectrum deal. And so was
the offer of Rs 380 crore to acquire those shares.
Salahuddin is a major civil contractor in
Tamil Nadu, headquartered in UAE, heading conglomerate ETA Star Ascon. He
is the contractor of new legislature complex in the State and having four-decade
long association with the DMK patriarch.
Caught in the act
MHA objected due to presence of Etisalat in
Pakistan and Afghanistan and its strategic alliance with Huawei, controlled
by the Chinese army
Foreign Investment Promotion Board rejected
the application of the UAE-based promoters for enhancing stake in Etisalat
DB Telecom
This is the first case in which Ministry of
Home Affairs has objected to spectrum allocation
Subramanian Swamy told the SC, 'If S Tel licence
can be cancelled in the name of national security, why not this?'
