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Rediff.com  » Business » ED slaps Rs 7,000 crore fine on Etisalat DB

ED slaps Rs 7,000 crore fine on Etisalat DB

Last updated on: July 8, 2011 20:42 IST

ED slaps Rs 7,000 crore fine on Etisalat DB

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The Enforcement Directorate on Friday slapped Rs 7,000 crore (Rs 70 billion) penalty on telecom firm Etisalat DB on various charges of FEMA violations in the 2G spectrum allocation scam.

The ED in its complaint filed before the Competent Adjudicating Authority for FEMA violations said the penalty has been slapped for "suspected contravention" of foreign exchange rules inside and outside the country by the company.

The adjudicating authority, ED special director Balesh Kumar, approved the order on the probe conducted by the investigating officer of the Delhi Zone, Rajeshwar Singh.

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Photographs: Reuters
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ED slaps Rs 7,000 crore fine on Etisalat DB

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ED sources said Etisalat DB, a joint venture between UAE-based Etisalat and DB Realty group, has been given 30 days time to explain why the company should not fined Rs 7,000 crore.

The ED has found violations of Foreign Exchange Management Act by the company on various fronts, including non-reporting of the receipt of funds from abroad within a stipulated period to the Reserve Bank of India.

Etisalat, as a foreign partner, holds a 45 per cent equity stake in Etisalat DB (former Swan Telecom).

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Photographs: Reuters
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ED slaps Rs 7,000 crore fine on Etisalat DB

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The agency had earlier charged Shahid Balwa-promoted Swan Telecom with committing FEMA contraventions to the tune of Rs 3,608 crore (Rs 36.08 billion).

"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 had said in its complaint against Swan Telecom.


Photographs: Reuters
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