Police arrest Indian executive in telecom scandal

By ASHOK SHARMA Associated Press

NEW DELHI (AP) - Federal investigators have arrested a Mumbai-based executive for his alleged part in an Indian telecoms industry scandal that has cost the government billions of dollars in lost license fees.

R.K. Gaur, a spokesman for the Central Bureau of Investigation, said Wednesday that the executive, Shahid Balwa, was arrested in Mumbai a day ago and was being brought to New Delhi for questioning.

He was taken into CBI custody a week after the agency arrested India's former telecommunications minister Andimuthu Raja and two other officials. Raja, his secretary and former ministry official have been charged with abusing their official positions to benefit some telecom companies.

The scandal stems from the sale in 2008 of cellular operating licenses under a "first-come, first-served" process that netted the government 124 billion rupees ($2.7 billion). Some licenses were awarded to ineligible participants who in turn sold their stakes at much higher prices than they bought them from the government.

An auction might have netted the government as much as $39 billion, according to some estimates.

Balwa is the vice chairman of Etisalat DB, a telecommunications joint venture between Abu Dhabi's Etisalat and Dynamix Balwas, the Press Trust of India news agency reported. He is also managing director of Dynamix Balwas - a real estate, hospitality and telecoms company that Balwa's family partly owns.

The news agency said Balwa allegedly sold a 45 per cent share in a telecoms license to Etisalat at more than twice the price that the Indian government sold it for.

Raja, who has denied any wrongdoing, was forced to resign from the government in November as the scandal tainted the image of Prime Minister Manmohan Singh.