Enforcement Directorate filed a chargesheet against telecom firms for Violating FEMA to the tune of Rs.4300 Crore in 2G scam

Enforcement Directorate filed a chargesheet against telecom firms
for Violating FEMA to the tune of Rs.4300 Crore in 2G scam

The Enforcement Directorate filed a chargesheet in Delhi Court against telecom firms for violating the Foreign Exchange Management Act (FEMA) to the tune of Rs 4,300 crore in the 2G spectrum scam case.


According to the ED investigation under FEMA has revealed 'large scale' contraventions by telecom companies and their associates in the 2G spectrum allocation case.

In a Chargesheet Enforcement Directorate has named following companies
1. Swan Telecom,
2. Loop Mobile
3. Loop Telecom
4. S Tel

All these companies have been found to be allegedly responsible for issuing shares to foreign investors without informing the Reserve Bank of India (RBI).

The ED has charged Shahid Balwa-promoted Swan Telecom, with committing FEMA contraventions to the tune of Rs 3,608 crore.

"This contravention was done by the company in issuing shares to foreign investor and resident investor under an agreement and had issued shares to foreign investor on an abnormal value to avoid the permission of FIPB (Foreign Investment Promotion Board), Government of India," the ED said in its complaint against Swan Telecom.

Swan Telecom Pvt Ltd issued 44.73 per cent shares to Dubai-based Etisalat and 5.27 per cent shares to Genex Exim as per agreement on September 23, 2009.

In the case of Loop Mobile India Limited based in Mumbai, the ED alleged FEMA contravention to a total amount of Rs 431 crore.


The Enforcement Directorate suspects breach of FEMA by Virgin Mobile, a Tata joint venture and is analyzing pricing issue of shares between Unitech and Telenor.

Enforcement Directorate also said that it is also looking into cash guarantee issued to Sistema.

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Sunday, April 10, 2011

Keywords Tags - Tags : 2G scam, Enforcement Directorate, FEMA violation