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Are 2G spectrum, housing loan scams linked?

Nov 26, 2010 08:44 PM IST India India
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New Delhi: The Central Bureau of Investigation (CBI) is investigating whether the 2G spectrum scam and the housing loan scam are linked. The agency is probing whether money was drawn from fraudulent bank loans to buy 2G spectrum.

CBI is probing a possible link after one of the beneficiaries, real-estate firm DB Realty, appeared to be a stakeholder in Etisalat DB, a 2G spectrum beneficiary.

CBI will also investigate whether the Maharashtra-based real estate firm has political links.

The CAG report in 2G spectrum had named Swan Telecom as one bidder which violated norms to win the bids. Swan is now called Etisalat DB.

DB Realty has denied any link.

The CBI raid was enough for realty shares to come crashing down for the second day even as the Finance Ministry struck a note of caution

Meanwhile, market watchdog SEBI is looking at the possibility of insider trading by those involved. The Income Tax department too could start a probe.

While the link between the 2G scam and the housing loan racket is not clear as yet, its a matter of time before investigative agencies start looking at the source of funds of companies for buying spectrum.

More specifically, the larger question is: if real estate companies were not eligible to enter the telecom market then how and why were the loans sanctioned by the banks?

The 2G audit has revealed that arm-twisting the law is not a one off situation in the telecom sector. Telecom is one of the highest revenue grossers for the country. But when it comes to meeting tax obligations, telecom operators would rather dig their heels in then pay back what rightly belongs to the government and the tax payer.