The Income Tax (IT) department’s status report on the role played by Swan Telecom and Videocon in the 2G issue has called into question transactions carried out by two Reliance companies and DB Realty just days before the licence was disbursed. The 1,500-page document will be filed with the Supreme Court on Monday by the IT department’s Mumbai division.
According to the report, on the day Swan Telecom acquired the 2G spectrum license, Rs 9.20 billion was transferred from Reliance Communications (RCOM) to Swan Telecom?s account through a Mauritius-based company, Tiger Trading. This money was obtained from the sale of preferential shares of the company at a premium of Rs 999 each. Swan Telecom later transferred this money to Reliance Telecom.
Though these transactions were shown as payments made towards buying passive assets, it is believed that this transaction was aimed at circulating money from one Anil Dhirubhai Ambani Group company to Swan, and then back to another company owned by the group.
Further, it is believed that the eligibility of 2G license required that the company must have assets worth Rs 10 billion and liquidity of at least Rs 1 billion. The transactions were done to ensure that Swan met the criteria on the day it acquired the license. Thereafter, the agreements were cancelled and the money was returned to Reliance.
Also indicting DB Realty, the report raised doubts over its share trading when it obtained the 2G license through Swan. It said that DB sold one share of the company for Rs 0.6 million, and another for Rs 1.06 billion, in order to create liquidity.
With regard to Videocon, while the report found the company’s dealings to be clean in most part, it raised a red flag over how the company’s shares traded at the same price as before on the day it acquired the license. It also expressed suspicion on Videocon’s sudden acquisition of the then defunct HFCL, a telecom equipment manufacturer.
