Shahid Balwa quits DB Realty over 2G scam

Almost a month after he was arrested in the 2G telecom scam, controversial builder-turned-telecom entrepreneur Shahid Balwa resigned from the board of DB Realty on Monday.

The company's scrips were hammered on the bourses after the announcement that it had accepted the resignation of the chief promoter with effect from February 9, a day after his arrest by the Central Bureau of Investigation (CBI). DB Realty, which went public in February 2010, listed at a price of Rs.468. On Monday, it fell below Rs.100.

Balwa is also the vice-chairman of Etisalat DB Telecom India, a joint venture between his group and UAE-based Etisalat. However, it was not known whether he had quit from that position.

The high-profile builder, who is close to A. Raja, the disgraced former telecommunications minister – and DMK MP, also arrested in connection with the scam, promoted Swan Telecom.

The firm, which was allegedly favoured by Raja, won 2G licences in 13 circules including Mumbai and Delhi, for Rs.1,537 crore. However, weeks later, Balwa sold a 45 per cent stake in the company to Etisalat for about Rs.4,500 crore.

According to the CBI, Swan Telecom did not meet the eligibility criteria for the unified access service licence for Delhi, but still managed to win the 2G spectrum allocation, thanks to Raja. The company paid Rs.200 crore as bribe to Kalaignar TV – which is owned by relatives of DMK chief and Tamil Nadu chief minister M. Karunanidhi.