Reliance Communications hits out at ‘fraudulent’ rivals

Anil Ambani’s Reliance Communications has lashed out at “unscrupulous” and “fraudulent” rivals, escalating hostilities in what many say is aimed at turning the attention of investigators probing the telecom scandal away from itself and on to competitors such as Bharti Airtel, Vodafone Essar and Idea Cellular. RCOM’s head of wireless business, Syed Safawi, on Sunday accused rivals of ‘fraudulently misleading the government’ in connivance with ‘certain Department of Telecom (DoT) officials’ and causing ‘staggering losses’ to the state.

He said promoters of these rival firms had amassed personal fortunes running into more than Rs 1,00,000 crore during the past decade by their actions. While Safawi, who read out from a statement that was later mailed to the media, did not name any rivals and only referred to them as “old 2G operators,” a senior Anil Ambani group official said the reference was to firms such as Bharti, Vodafone and Idea. Bharti Airtel and Vodafone Essar declined to comment.

This surprise fusillade of allegations came as shares in all Anil Ambani group firms were battered last week, with RCOM falling to a record low amid speculation that CBI officials investigating the multi-billion dollar telecom scandal were soon likely to question its officials. Shares in RCOM, closed last week at Rs 97.15, off record lows but down from the . 160-level they traded three months ago. RCOM said while the CBI was examining “certain employees of the Reliance ADA group,” the investigations were by no meant restricted to its executives and had covered more than 50 people from across a large number of telecom operators.

The CBI has already arrested former telecom minister A Raja and Shahid Balwa, the founder of the erstwhile Swan Telecom. The Comptroller & Auditor General has pegged losses to the government because of this scandal at . 176,000 crore. RCOM has had past links with Swan, now renamed Etisalat DB Telecom , after UAE’s Etisalat bought a stake in the company. Balwa is one of the founders of DB Realty, a Mumbaibased property developer. The Anil Ambani group held a 9.9 percent stake in Swan Telecom when the latter applied for licences in March 2007, but says it sold its shares before Swan was awarded telecom licences in January 2008.

An RCOM official, Hari Nair, held the position of Swan’s company secretary, but the company says he “ceased to hold the post well before a licence was granted to Swan Telecom.” RCOM declined to disclose Nair’s present role. RCOM said it was a victim of a “malicious campaign of disinformation, falsehoods and calumny” being spread by rivals and accused the socalled “old 2G operators” of obtaining licences without any auction process and without paying any licence fees in 1994-95 . But some experts differed with its argument.

“Reliance had ample and equal opportunity to obtain these very 2G metro licences that its competitors Bharti Airtel and Vodafone Essar acquired. These metro licences may have been cheap but they were given through an open process,” said Mahesh Uppal, director at Com First India. “On the contrary, few would consider that the process to award dual technology licences was fair or transparent. It would be difficult to argue that Reliance’s competitors had advantages over it in either licensing or allocation of 2G spectrum.” But RCOM said the award of dual technology licence to it was legal and had been upheld by the Delhi High Court and by the TDSAT.