Swan, S Tel, Etisalat, Loop Mobile and Wellcom Communications face heat.
The Enforcement Directorate (ED) on Saturday filed charges against Swan, S Tel, Etisalat, Loop Mobile and Wellcom Communications in the 2G spectrum case for violating Foreign Exchange Management Act (FEMA) amounting to Rs 4,300 crore.
The Enforcement Directorate filed the charges before an adjudicating authority, a special director-rank officer of the ED. It has found large-scale contraventions by the telecom companies.
The ED is also investigating Virgin Mobile for suspected violations.
Swan Telecom has been accused of causing contraventions of around Rs 3,600 crore. The ED has also accused Swan of issuing shares to foreign investors at an abnormal value to avoid permission of the Foreign Investment Promotion Board.
Swan had issued 44.73 per cent of its shares to Dubai-based Etisalat and 5.27 per cent to Genex Exim as per an agreement on September 23, 2009.
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Swan Telecom, while issuing shares to the foreign investors under the agreement, also allegedly contravened the provisions of the laid-down rules prescribed by the Commerce and Industry Ministry by appointing a director who had been nominated by Etisalat and making arrangement of a steering committee having members of their foreign partner for functioning of Swan Telecom.
The charges against Mumbai-based Loop Mobile India Limited are for causing contravention of about Rs 431 crore, not reporting the receipt of funds from abroad within a stipulated period of time to the Reserve Bank of India, not reporting issue of shares to foreign investors within the stipulated time and for purchasing shares of an Indian company from the funds of foreign direct investment (FDI). Further, Loop Telecom has been accused of causing violations of Rs 184.28 crore for similar reasons.
The Gurgaon-based S Tel has been accused of causing contraventions worth Rs 96.60 lakh for not refunding the balance of the FDI to foreign investors within the stipulated time.
The ED is also trying to ascertain the end use of the foreign funds. The Directorate has also come across suspected contravention in Virgin Mobile (Tata Group) and is analysing the pricing issue of shares between Unitech and Telenor. The cash guarantee issue of Sistema is also being looked into. The issue of merger of companies after issue of licences is also being investigated under FEMA,1999.
The ED charges come a day after the Supreme Court ordered daily hearing of the spectrum case at a special court which the SC set up.