Firm accused of not reporting funds from abroad to RBI.
The Enforcement Directorate (ED) on Friday slapped a Rs 7,100-crore penalty on Etisalat DB for alleged violations of the Foreign Exchange Management Act (FEMA).
ED, in a complaint before the Competent Adjudicating Authority for FEMA, said the penalty had been imposed for suspected violations of foreign exchange rules inside and outside the country.
ED said the violations included non-reporting of receipt of funds from abroad within the stipulated period to the Reserve Bank of India, according to people close to the development.
The company has been given 30 days to explain why it should not be fined.
Etisalat DB, a joint venture between UAE’s Etisalat and India’s DB Realty, was given licences to offer mobile services in 13 circles in 2008 when A Raja was the telecom minister. Raja is in judicial custody in the 2G scam case.
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Etisalat DB (earlier Swan Telecom) chief Shahid Usman Balwa and Director Vinod Goenka are also in custody in the 2G scam.
ED Special Director Balesh Kumar approved the order on the basis of the probe conducted by the investigating officer of the Delhi Zone, Rajeshwar Singh. An ED official confirmed a notice had been sent to the company.
DB Realty, one of the partners, refused comments. Etisalat as well as Etisalat DB did not respond to queries.
The controversy had erupted after a Comptroller and Auditor General (CAG) report said as many as 85 new licences of the 122 issued in 2008 were illegal.
CAG also said the issuance of licences at a price fixed in 2001 caused a loss of Rs 1.76 lakh crore to the government. The Central Bureau of Investigation is probing the matter. The Supreme Court is monitoring the probe.
Etisalat bought a 45 per cent stake in Swan Telecom for about Rs 4,150 crore. Etisalat DB has 6,52,370 subscribers an a market share of 0.17 per cent in the GSM market.
ED had earlier charged Shahid Balwa-promoted Swan Telecom with committing FEMA violations to the tune of Rs 3,608 crore.
ED is also investigating other new telecom companies such as Loop Telecom and STel for FEMA violations.