New Delhi: Reliance Telecom Limited (RTL) had instructed a bank in March 2007 to transfer from its account Rs 974.49 crore to Swan Telecom Pvt Ltd (STPL) which belonged to the Reliance ADA Group (RADAG), a CBI witness on Tuesday told a Delhi court trying the 2G spectrum allocation scam case.
Henry Richard, Registrar of Companies, who was deposing as a prosecution witness in the case, told Special CBI Judge O P Saini that RTL, Reliance Communication Ltd (RCL) and STPL were "associates of each other" and these companies belonged to the RADAG.
The deposition by Richard assumes importance as CBI had, in its charge sheet filed on April 2 last year, alleged that RTL used STPL, an ineligible firm, as its front company to get 2G licenses and the radio waves.
During his cross examination by senior advocate H H Ponda, who appeared for RTL, an accused firm in the 2G case, Richard said he had come across some documents in the CBI office which showed certain "material transactions" between STPL and RTL.
"I had come across a letter dated March 2, 2007 addressed to HDFC, Fort Branch, Mumbai, from RTL instructing the bank to transfer Rs 974.49 crore from RTL account...To STPL," he said.
The witness further said this amount related to "subscription of preference shares" along with premium and that RTL had invested 9.87 percent of equity shares in STPL.
Asked by defence counsel why he had nowhere stated in his March 2011 report that STPL was an "associate" of RADAG but had said so during recording of his statement in the court, the witness said he had concluded in his report as per the facts mentioned in it.
Richard said "I have concluded in my report... STPL, RTL and RCL are associates of each other, though the question referred by CBI also included ADA group company, though in the body of the report, I have mentioned that the said companies belong to ADA Group."
"I mean the companies belong to ADA Group," the witness said adding he had mentioned in his report that STPL was an ADA Group company.
The charge sheet has also named Group MD of RADAG Gautam Doshi, group President Surender Pipara and senior Vice President Hari Nair, as accused in the case for allegedly entering into a criminal conspiracy to cheat the government by getting licenses in an illegal manner.
STPL and its promoters Shahid Usman Balwa and Vinod Goenka are also facing trial in the case along with others.
During his cross examination, Richard said that in order to decide if two parties are associates as per the Accounting Standard (AS-18), both the parties must be legal entities.
He said that ADA Group, by itself, is not a legal entity.
He further said that in order to be an associate of another entity, one entity must be an investing party and must have significant influence in the investee party.
He deposed that as per the records before him, RCL had not invested anything in STPL.
First Published: Tuesday, October 16, 2012, 21:34