2G scam: DB Realty’s Shahid Balwa is Arrest No 4

The Enforcement Directorate had trailed Rs 214 crore allegedly routed by Balwa and DB Realty to Chennai-based Kalaignar television,a channel promoted by family members of DMK leader and Tamil Nadu Chief Minister M Karunanidhi.

Balwa’s DB Realty had acquired Swan Telecom which bagged 2G licences for 13 circles. Within months,the company sold 45 per cent of shares for Rs 4,500 crore to UAE-based Etisalat. Swan Telecom was later renamed Etisalat DB.

Balwa’s is the fourth arrest in the case — after Raja and bureaucrats Siddharth Behura and R K Chandolia. The CBI said that Balwa needed to be confronted with Raja to trace the money trail.

CBI officials claimed they had clinching evidence against Balwa,that he channelled the money allegedly received by the former Telecom minister and invested it in the real estate sector.

Balwa was questioned earlier and had furnished his bank and company details to investigators.

DB Realty had earlier clarified that it did not directly invest in Kalaignar TV and that a subsidiary,Dynamix Realty,did. In its statement,N Sridhar,CEO of DB Realty,said the money was later returned and the company earned 8% interest on it.

However,sources pointed that Dynamix Realty,a partnership firm owned 99% by DB Realty,through a three-stage transaction gave about Rs 214 crore and ended up owning 30% in Kalaignar TV.

Investigators are also probing the role of other companies and more arrests are likely to take place. Sources said that the ownership of Genex Exim Ventures,which has a strong connection with TN politicians is also being examined.