Track2Realty Impact
By: Ravi Sinha
Shahid Balwa, a key figure in the telecom scandal that has shaken the government, has resigned as the head of his flagship real estate company, DB Realty. Balwa is vice-chairman of Gulf group Etisalat’s joint venture in the country and at 36 was the youngest billionaire on last year’s Forbes India rich list.
Track2Realty was the first to report on his involvement in the telecom scam and his company allegedly absorbing underworld money of Dawood Ibrahim. He was detained by investigators last month, becoming the first executive arrested in connection with a probe into allegedly improper allocation of telecoms licences to several companies in 2008.
At the time of his arrest last month, DB Realty said that “neither Mr Balwa nor any person/entity forming part of the DB Group has done anything inappropriate or illegal.” It added that Mr Balwa “will be strongly contesting the proceedings”.
After a statement on Monday from Mumbai-based DB Realty that it had accepted Balwa’s resignation, its shares fell by 15 per cent to an all-time low of Rs100 – less than a quarter of their listing price – before recovering some ground.
Etisalat, the state-controlled telecoms group of the United Arab Emirates, has named DB Realty as a partner in its Indian joint venture Etisalat DB.
The company, previously called Swan Telecom, paid a reported $340m for 13 2G licences shortly before Etisalat paid about $900m for a 45 per cent stake in September 2008.
The national auditor claimed in its report into the licensing round that Swan had suppressed information about its group records during the application. It claimed Swan had been unduly afforded preference over rival bidders for the spectrum. Etisalat DB did not respond to a request for comment on whether Balwa would retain his vice-chairmanship of the joint venture.
“The Board of Directors of the company on March 5, 2011 has noted and accepted the resignation of Shahid U Balwa, as Managing Director and also as director of the company in view of his preoccupations relating to certain investigations as per his letter of the same date,” DB Realty said in a filing to the Bombay Stock Exchange.
“The company continues its business in the normal course under Managing Director Vinod K Goenka with the guidance of the board,” the filing added.
