The Enforcement Directorate (ED) on Saturday charged five telecom firms for alleged violation of Foreign Exchanges Management Act (FEMA) involving Rs 4,300 crore in the 2G spectrum allocation case.
The complaints were filed by the investigating officer under Section 16 (3) of Foreign Exchange Management Act (FEMA), 1999 before the Competent Adjudicating Authority, ED sources said.
The complaints have named Swan Telecom Pvt Ltd, Loop Mobile India Ltd, Mumbai, Loop Telecom Ltd, New Delhi, S. Tel Pvt Ltd, Gurgaon, and Wellcom Communications India Pvt Ltd, Chennai and Wellcom Communications Pvt Ltd, Chennai.
The ED action comes a day after the Supreme Court, monitoring the 2G spectrum scam investigations by the ED and Central Bureau of Investigation, observed that there must be quick progress with the 2G scam trial.
The ED has also come across “suspected contravention in Virgin Mobile (Tata Group)'' and is analysing the pricing issue of shares between Unitech and Telenor. The complaint said that the cash guarantee issue of Sistema is also being looked into by the Directorate. Also, the issue of merger of companies after issue of licences is being probed.
The Directorate is also trying to find out the source of funds in the companies based abroad and who the owners of the companies are. For this purpose, it has issued letters to the source abroad based in 12 countries. Besides, Letters of Request have been sent to five countries for investigation outside India.
The ED found fault with Swan Telecom Pvt Ltd for contravention of FEMA provisions for the total amount of Rs 3,608 crore which, it alleged, was done by the company in issuing shares to a foreign investor and a resident investor under an agreement. The company had issued shares to foreign investor on an abnormal value to avoid the permission of the Foreign Investment Promotion Board.
Swan Telecom issued shares to Etisalat, Dubai and Genex Exim according to an agreement of 2008, giving Etisalat, Mauritius 44.73 per cent, Genex Exim 5.27 per cent. Swan Telecom disclosed that issue of equity to Genex Exim was under resident category but it was an indirect foreign investment in Swan Telecom because funds into Genex Exim were brought from Dubai through an intermediary.
According to FEMA provisions, penalty under Section 13 may, in such cases, be up to three times the sum involved or up to Rs 2 lakh where the amount of contravention is not quantifiable.