India Incs arresting silence

However,Ficci Director General Rajiv Kumar said,hopefully,the ongoing probe will lead to more transparent and robust regulatory framework and environment… in which the business and economy can grow.

In India,corporate honchos are seldom arrested. The first big corporate honcho ever arrested in India was B Ramalinga Raju,promoter of Satyam Computer Services Ltd. After admitting to a Rs 7,000-crore accounting fraud on January 7,2009,he was put under judicial remand on January 9. He was granted bail by the Andhra High Court in August 2010,but the Supreme Court set aside the High Court order. While the country has been hit by stock market scandals and arrests of scamsters made,the organised manufacturing and services sectors were never really hit.

The capital market and the banking sector witnessed some high profile arrests in the past. Harshad Mehta was arrested in the 1992 securities scam. UCO Bank chairman K M Margbandhu was sacked and arrested. Planning Commission member V Krishnamurthy and SBI managing director V Mahadevan were then forced to quit their offices. In the 2001 stock scam,high-profile broker Ketan Parekh was arrested. Dinesh Dalmia,promoter of DSQ Software and DSQ Biotech,was also arrested in the same scam. LIC Housing CEO RR Nair was arrested for his alleged involvement in the 2010 housing loan scam.

It is really difficult to make a statement. The whole country is tarnished. I dont want to comment really, said Niranjan Hiranandani,Managing Director,Hiranandani Group of Companies,summing up the mood in Corporate India. I have no comments to make, said Larsen & Toubro chairman AM Naik.

I cant comment on that….wont like to either, said Rajeev Memani,CEO & Country Managing Partner,Ernst & Young India,one of the Big Four consulting firms,when asked if the event had made India Inc more wary. Rajan Mittal,Vice-chairman and Managing Director,Bharti Enterprises,said,No comments. DLF Developers Managing Director Rajeev Talwar too said,We have no reactions.

Some others either said they were in a meeting or they did not have any idea what happened. I am in a meeting. Dont know what is happening, said Hari Shankaran,Vice chairman and Managing director,IL&FS.

I have no idea. I dont know (what has happened), R C Bhargava,CEO,RCB Consulting Private Ltd and ex-managing director,Maruti Suzuki.

While Reliance-ADAG refused to make any statement,Unitech said,We would like to clarify that such a development in this on-going matter will not have any adverse affect on Unitech or its real estate business as it is with respect to Unitech Wireless,which is a separate venture in the telecom business. Unitech is managed by a competent set of senior experienced professionals and promoters and will continue to pursue our growth plans.

N Shridhar,Group Director (Business,Strategy and Finance),DB Realty said,We would like to state that these developments will not affect the operations of DB Realty Limited in any manner whatsoever. There is no direct or indirect shareholding of DB Realty Limited in the telecom business and the company will continue its business in the normal course.

Vinod Goenka,52,is the managing director and co-founder of DB Realty. His net worth is estimated at $1.18 billion,according to the Forbes magazine. Goenka has been in the real estate business for the last 25 years and is a mentor to the Dynamix Balwa Group. He dropped out of college to join his fathers small construction firm in Mumbai and helped it expand and later form into the Dynamix Group. In 2007,he partnered with the Balwa family to form DB Realty .

DB Realty

Founded in the year 2007,DB Realty witnessed a meteoric rise in the last 4 years,making it one of the top five real estate firms in India. The company has completed over 30 projects and is listed both on National Stock Exchange and Bombay Stock Exchange. It registered a net profit of Rs 227.39 crore in 2009-2010. As on April 20 the companys turnover stood at Rs 38.35 crore. It was listed on the bourses in February 2010.

Charges: According to the Central Bureau of Investigation (CBI) chargesheet on the 2G scam,Vinod Goenka along with Shahid Balwa was one of the directors of Swan Telecom and had acquired a majority stake in the company through DB Infrastructure. He carried forward fraudulent applications of Swan Telecom submitted by the previous management,despite knowing the fact that the company was ineligible to get Unified Access Services (UAS) licence. He and Balwa created fraudulent documents including the board minutes of Giraffe Consultancy. He concealed or furnished false information to Department of Telecom (DoT) regarding shareholding pattern of Swan Telecom.

The charges stated above are punishable under Sections 120-B,420,468,471 IPC and also under 13(2) read with 13(1) (d) of the Prevention of Corruption Act,1988.

Gautam Doshi,57,is the Group managing director of Reliance Anil Dhirubhai Ambani Group (Reliance ADAG). He is one of the three group MDs at R-ADAG.He joined the company in 2005 after the de-merger of the then Reliance Group.

Past: Prior to taking up his current assignment,Doshi was a senior partner with RSM & Company,a chartered accountant firm. His expertise lies in areas such as mergers & acquisitions,taxation,transfer pricing,accounting and auditing.

A chartered accountant ,Doshi,in his 30 years of practice,has been involved in various assignments in the fields of finance,securitisation and asset reconstruction.

R-ADAG

R-ADAG is one the countrys biggest private sector business houses with a market capitalisation of Rs 325,000 crore,net assets in excess of Rs115,000 crore and a net worth of Rs 55,000 crore. Its interests range from communications (Reliance Communications) and financial services (Reliance Capital) to generation,transmission and distribution of power (Reliance Energy),infrastructure and entertainment. It has a customer base of over 100 million and a shareholder base of over 12 million.

Charges: Against Gautam Doshi,Group MD,R-ADAG; Hari Nair,senior VP R-ADAG ; and Surender Pipara,senior VP,R-ADAG:

Criminal conspiracy with DoT officials concerned to get telecom licence causing a loss to the government. The three officials on receipt of approval of dual technology spectrum to Reliance Communications,knowingly did not withdraw their fraudulent application for UAS licence and in conspiracy with accused Shahid Balwa and Vinod Goenka transferred the management and control of Swan Telecom to them,thereby intentionally aiding/facilitating accused Balwa and Goenka.

Sanjay Chandra,38,is the son of executive chairman of Unitech,Ramesh Chandra,and the managing director of the company. With Unitech since 2001,he has been responsible for launching various projects. He is also responsible for diversifying the company into the telecom business and is the chairman of Unitech Wireless,which services under the brand of Uninor.

Unitech

Established in 1972,Unitech is a leading real estate developer in India. Unitech and Norway based Telenor Group the 6th largest mobile communication provider in the world came together to build Uninor,a telecommunication services company providing GSM services across India. It was listed on bourses in the year 2000 and the net profit then stood at Rs 8.62 crore while net profit in the financial year 2010 stood at Rs 6946.4 crore. As on April 20 its market cap was Rs 10,587.64 crore.

Charges: The charges against Chandra are that he entered into criminal conspiracy with accused former telecom minister A Raja and his personal secretary RK Chandolia along with others during September 2009 to get the UAS licenses for providing the telecom services to otherwise an ineligible company to get Unified Access Services (UAS) licence. He as managing director of Unitech Wireless was looking after the telecommunications business through eight group companies of Unitech. The first-come-first-serve procedure of allocation of Unified Access Services licence and spectrum was manipulated by the accused persons in order to benefit Unitech Group of companies. The above charges are punishable under Section 120-B,420,468,471 IPC and also under 13(2) read with 13(1) (d) of Prevention of Corruption Act,1988 against accused. Chandra is accused of substantive offence under Section 420 IPC.