Anil Ambani, the billionaire chairman of India’s Reliance ADA group, appeared yesterday before a parliamentary panel investigating a multi-billion dollar telecoms graft scandal that has rocked the country’s political and business establishment.
Ambani’s testimony comes days after police indicted officials and a unit of his group for conspiracy, cheating and other offences during a flawed 2008 telecoms license grant process that may have lost India up to US$39 billion in revenue.
The scandal is the largest of several corruption cases to have emerged in Indian Prime Minister Manmohan Singh’s second term. It has badly damaged the government’s credibility and set off worries about regulatory risk in Asia’s third largest economy.
Police accuse Reliance Telecom, a unit of Reliance Communications, and three Reliance ADA officials, of conspiring to set up Swan Telecom as a front company to gain valuable radio spectrum. Indian rules bar an existing license holder from owning more than 10 percent in another operator in the same market.
Ambani, one of India’s highest profile businessmen, arrived at the parliament building yesterday and entered through a side gate, a day after tycoon Ratan Tata appeared before the same Public Accounts Committee.
While the committee’s recommendations are not binding on the government, the spectacle of some of India’s biggest business names being questioned is almost unheard of in a country where leading tycoons have long been seen as untouchable.
The parliamentary committee, which scrutinizes government accounts, is headed by lawmaker Murli Manohar Joshi, a member of the main opposition Bharatiya Janata Party.
The panel was also due to hear testimony yesterday from Sigve Brekke, the head of Telenor in Asia who is also in charge of the Indian unit; Sanjay Chandra, managing director of Telenor’s partner Unitech; and Atul Jhamb, the chief executive of Etisalat’s Indian joint venture.
CAUTIOUS RECOVERY: While the manufacturing sector returned to growth amid the US-China trade truce, firms remain wary as uncertainty clouds the outlook, the CIER said The local manufacturing sector returned to expansion last month, as the official purchasing managers’ index (PMI) rose 2.1 points to 51.0, driven by a temporary easing in US-China trade tensions, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The PMI gauges the health of the manufacturing industry, with readings above 50 indicating expansion and those below 50 signaling contraction. “Firms are not as pessimistic as they were in April, but they remain far from optimistic,” CIER president Lien Hsien-ming (連賢明) said at a news conference. The full impact of US tariff decisions is unlikely to become clear until later this month
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