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Thomas K. Thomas

New Delhi, July 29 The Department of Telecom has started an internal investigation on charges of corruption against some of its officers for allegedly showing favour by giving telecom licence to Swan Telecom, now called Etisalat DB.

The move follows orders from the Central Vigilance Commission, which has asked the DoT to submit a report by August first week. According to an internal note dated July 24, the DoT has started the investigations and asked its officers for comments on the allegations. The Commission had earlier asked the DoT to submit all files related to Swan Telecom to track the changes in shareholding of the company.

Swan had come under the Central Vigilance Commission’s scanner after it was alleged that the company was indirectly controlled by the Anil Ambani-promoted Reliance Communications. Both Swan and Reliance Communications have refuted the allegations.

According to DoT rules, a single company cannot have more than 10 per cent stake in two different telecom entities offering services in the same areas. Since Reliance Communications already has a pan-India unified access licence, it should not have any equity stake of more than 10 per cent in other telecom companies.

The allegations were made as, according to the application submitted by Swan to the DoT in March 2007, Tigers Traders Pvt Ltd held 90.1 per cent stake and Reliance Telecom owned 9.8 per cent. Later, Swan told the DoT that Reliance Telecom had divested its entire stake.

In September 2008, Swan – now controlled by Dynamix Balwas Group – sold 45 per cent equity for $900 million to Etisalat by issuing fresh shares. This took the total value of the company to $2 billion. Since then the company has changed its name to Etisalat DB. Etisalat DB hs entered into a Rs 10,000-crore deal with Reliance under which the latter will roll out and manage the network.

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