2G: CBI claims it has spotted Unitech money trail to Isle of Man

More trouble is brewing for Unitech’s Sanjay Chandra. The Central Bureau of Investigation (CBI) claims to have found a money trail that links Unitech’s money to 2G spectrum allocations.

In a plea submitted to the court of special judge OP Saini at Patiala House in Delhi, the CBI alleges that Unitech made an investment of $51 million (around Rs 250 crore) in a tax haven, the Isle of Man, around the time when it was allocated 2G spectrum by A Raja. The CBI suspects that this money was used as a quid pro quo to pay public servants in lieu of allocation of 2G spectrum.

Judge Saini has allowed the CBI to investigate the ‘possible’ money trail in the Unitech case. The counsel for Unitech Wireless, Rebecca John, confirmed that “Sanjay Chandra was called for questioning once and we went.’’

 2G: CBI claims it has spotted Unitech money trail to Isle of Man

More trouble is brewing for Unitech’s Sanjay Chandra. Adnan Abidi/Reuters

The CBI is preparing Letters Rogatory (LRs) for further investigations by a special team to be sent abroad. The investigation agency smells something fishy in the fact that there was no resolution from the board of directors for such a huge investment (Rs 250 crore) in the Isle of Man. Within a year, Unitech showed the entire investment as a loss.

However, the Unitech side is sanguine. “We are 100 percent sure there is nothing there (Isle of Man). Let them (the CBI) investigate. They are free to do it,’’ says Rebecca John, while adding that the board of directors of the company had indeed cleared the investment and Sanjay Chandra would submit the resolution whenever he was called next.

Sanjay Chandra was recently released on bail in the 2G spectrum scam. The CBI has already filed a chargesheet in his case. An additional chargesheet is expected in the face of the CBI’s claim that it has hit the money trail in Sanjay Chandra’s case.

According to the CBI, all the decisions regarding investment of Rs 250 crore were made around the time when Unitech had made applications for 2G spectrum in 22 circles before then Telecom Minister A Raja. Raja had manipulated the cutoff date for allocation of 2G spectrum in 2007. On the same day, the CBI alleges, Unitech Overseas Ltd, a wholly-owned subsidiary of Unitech Ltd, invested $3,000 each in Unitech Hotel Ltd and Unitech Malls Ltd in the Isle of Man. Both the companies were newly incorporated.

Subsequently, on 24 December 2007, the CBI alleges, Unitech Overseas Ltd invested $51 million in “one yield enhancement certificate’. Mauritius-based Pluri Emerging Companies was involved in this deal.

And nearly a year later, on 5 January 2009, the CBI alleges that Unitech showed complete loss and showed “zero” against the investment of $51 million dollars in its record book.

The CBI alleges that this was a ‘dubious’ deal, as the Unitech Ltd board had made ‘no resolution’ for transferring such a huge amount of money (Rs 250 crore) to Unitech Overseas Ltd in the Isle of Man. The CBI suspects that the money has been used as a quid pro quo to pay public servants, who helped first timer Unitech Company to get telecom licences in 22 circles.

This is a big development considering that on 29 August 2011, during a fortnightly review hearing on the 2G scam investigations, the CBI’s public prosecutor UU Lalit had told the Supreme Court that the CBI had no evidence of a “quid pro quo" or money trail between Unitech Wireless and former Telecom Minister A Raja.

Interestingly, Mauritius-based Pluri Emerging Companies (PEC) has also figured in an FIR filed against former Andhra Pradesh Chief Minister YS Reddy’s son Jagan Mohan Reddy. Here, too, Pluri, which is not registered with Sebi as a foreign institutional investor (FII), is alleged to have played the role of middleman in passing equity shares of a Bangalore-based power company to Jagan Mohan Reddy.

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Updated Date: Mar 20, 2012 14:10:11 IST

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