2G scam: ED to attach properties of errant telecom firms

The Enforcement Directorate on Wednesday told the Supreme Court that property worth Rs. 2,000 crore each will be attached against two companies which are involved in the 2G spectrum scam during the tenure of former telecom minister A. Raja.

“Property worth Rs. 2,000 crore has to be attached relating to these companies,” senior advocate K.K. Venugopal, appearing for the ED, submitted before a bench comprising justices G.S. Singhvi and A.K. Ganguly.

Mr. Venugopal, who was reading the excerpts of the fresh status report of the ED submitted in a sealed cover, did not mention the names of the company but assured that attachment proceedings will be initiated soon and will be completed within two months.

He hinted that attachment orders will be issued shortly under the Prevention of Money Laundering Act (PMLA) and Foreign Exchange Management Act (FEMA), against the two companies against whom the ED has so far registered the complaints.

“It will be done in two months time against the companies whose names have been mentioned in the complaints. We have to collect details of their properties as many of the companies keep benami properties,” the senior advocate said when the bench asked how much time will the ED take to complete the investigation.

The ED in its status report said investigation was in progress regarding the involvement of five foreign companies in the 2G scam which are registered in Virgin Islands.

On hearing this, the bench asked “what is the response of the RBI on it?”

Mr. Venugopal said till now the ED has not written about it to the RBI and future course of investigation will follow.

However, he said action has been taken and complaint has been registered for FEMA violation of Rs. 4,000 crore which will be added on as the investigation will progress and attachment will start.

The ED gave details of various financial transaction connected with the scam and said that the company connected with Shahid Usman Balwa’s DB Realty was involved in the movement of Rs. 1,400 crore.

“The companies are connected with DB Realty. Funds started moving from a real estate company. Rs. 1400 crore went from the top to the bottom and goes back to the original source,” Mr. Venugopal said referring to the transaction of money among various companies after the grant of 2G licence.

CBI seeks more time

Meanwhile, the CBI also filed a fresh status report about its probe and sought more time to complete the investigation relating to the allocation of spectrum during the period of 2001-07.

The bench appreciated the probe done by the CBI and the ED and said they have done a “commendable job”.