Etisalat DB penalty slap

The Indian Enforcement Directorate has slapped a $1.6bn penalty on Etisalat DB for alleged violations of the Foreign Exchange Management Act (FEMA). Etisalat DB, a joint venture between UAE’s Etisalat and India’s DB Realty, was given licences to offer mobile services in 13 circles in 2008 when the infamous A Raja was the Telecom Minister. Raja is in judicial custody in the 2G scam case. The controversy forced Andimuthu Raja, to resign from his post, and prompted the arrest of Etisalat DB's Vice Chairman, Shahid Balwa. Etisalat DB (earlier Swan Telecom) Chief Shahid Usman Balwa and Director Vinod Goenka are also in custody in the 2G scam. Enforcement Directorate in a complaint before the Competent Adjudicating Authority for FEMA, said the penalty had been imposed for suspected violations of foreign exchange rules inside and outside the country. According to the Indian Enforcement Directorate violations included non-reporting of receipt of funds from abroad within the stipulated period to the Reserve Bank of India. Etisalat DB has been given 30 days to explain why it should not be fined. A 45 per cent stake in Swan Telecom for about Rs 4,150 crore was bought by Etisalat. Etisalat DB has 6,52,370 subscribers and a market share of 0.17 per cent in the GSM market in India.