Followers

Wednesday 12 October 2011

Ananda Krishnan, Marshall, Maxis Comms under probe for Aircel deal


Written by Nadia S Hassan
Tuesday, 11 October 2011 12:45

KUALA LUMPUR: The Central Bureau of Investigation of India (CBI) has filed a First Information Report (FIR) commencing formal investigations in relation to the purchase of India’s Aircel Ltd by Maxis Communications Bhd (MCB) in 2006.

In a statement, MCB said it had been aware of the investigations by CBI for some time and has extended its full cooperation.

“Whilst the FIR has not been provided yet to MCB, the company understands that it is expressly named in the report, along with other nominated persons, and that it relates to allegations of coercion and corruption surrounding the Aircel purchase,” said MCB.

The FIR also named businessman T Ananda Krishnan, MCB’s major shareholder, and Maxis Bhd’s non-executive director Augustus Ralph Marshall. MCB is the major shareholder of locally-listed Maxis with a 70% stake, and holds 74% of Aircel.

According to reports out of India, the CBI had registered a case against India’s former telecoms minister Dayanidhi Maran, his brother Kalanidhi Maran, Ananda and Marshall among others on charges of criminal conspiracy under the Indian Penal Code (IPC) and Prevention of Corruption Act.

The CBI was quoted as saying that it had registered the case under section 120(b) of IPC read with 13(2) with 13(1)(d) and also section 7 and 12 of the Prevention and Corruption Act. Once the case was registered last Sunday, the CBI had subsequently conducted raids at the premises of the Maran brothers in Delhi and Chennai. It is unclear whether any raids were conducted at premises belonging to Ananda and Marshall.

MCB steadfastly denied any wrongdoing, stating that the acquisition of Aircel was a commercial, arms-length transaction between a willing-buyer and a willing-seller.

At the heart of the investigation is a complaint by Aircel founder C Sivansankaran, who alleged that Dayanidhi, who was telecoms minister between 2004 and 2007, had favoured MCB in the takeover of the Indian telco, which resulted in his exit. Sivasankaran had alleged that Aircel had not been awarded a 2G telecom licence until it was sold to MCB. It is alleged that Dayanidhi had delayed the application made by Aircel for the licence and spectrum, which placed pressure on Sivasankaran to sell.

Sivasankaran also alleged that in return, privately-owned Astro All Asia Networks Plc, where Ananda is a major shareholder, then acquired a stake in Sun Direct, which is majority-owned by Kalanidhi. Last year, Astro upped its stake in Sun Direct from 20% by another 15%.

However, it should be noted that in early October a three-member arbitration panel in Singapore had dismissed Sivasankaran’s charge that MCB had acted in bad faith by breaching an agreement to do an initial public offering of Aircel within three years of the former’s acquisition of the latter. The three-member panel had ordered Sivansankaran’s Siva Ventures Ltd (SVL) to pay US$7 million (RM21.91 million) to MCB as legal costs, according to reports.

MCB pointed out this recent decision in its statement, adding, “The company paid the asking price demanded by the seller, SVL.”

MCB had acquired its stake in Aircel back in January 2006 for US$800 million. In recent months, MCB had come under the spotlight for its investment in Aircel after reports concerning improprieties about the deal surfaced. MCB had stoically denied the allegations at the time as well, and had stated that as far as it was aware there was no pressure on SVL to sell its stake in Aircel.

“MCB will continue in its commitment to the Indian telecommunications market in which it has invested more than US$8 billion since it acquired Aircel to establish and develop a pan-Indian mobile telephony business, along the way building a subscriber base of more than 50 million customers. This investment includes US$2.5 billion invested in the 2010 Indian 3G/BWA spectrum auction and in respect of the deployment of 3G network over Aircel’s licence areas,” said MCB.

Following the publication of the Indian reports, Maxis also issued a statement to the local bourse saying, “The FIR does not have any impact on Maxis, the entity listed on Bursa Malaysia.”


This article appeared in The Edge Financial Daily, Ocotber 11, 2011.

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