Who owns Aircel: the Reddy stake mystery

Agencies

New Delhi, 14 June 2011: Till now its been Swan Telecom and Reliance, Unitech wireless and Kalaingar TV that have felt the 2G spectrum scam heat. Now as the Central Bureau of Investigation (CBI) enters its next level of investigations, with deals that took place between 2001 to 2007, it is looking at the other big player - Aircel and its chairperson, Suneetha Reddy, who is the joint MD of Apollo Hospitals Group.

 

CBI is probing Aircel chairperson Suneetha Reddy’s stake in the company and will summon her to get clarifications on her stake in Aircel. CBI wants explanation on 100 per cent subscription of preference shares by Malaysian company Maxis in Reddy subsidiary. CBI is also probing why Reddy and her husband got 26 per cent for Rs 34 crore, while Maxis paid Rs 7800 crore for 74 per cent.

 

The investigative agency is also looking at Aircel deal after revelations by Sivasankaran that Maran forced him to sell. Maxis in march 2006 told the Malaysian stock exchange that they own 99.3 per cent stake in Aircel. Enforcement Directorate also probing Aircel for exceeding 74 per cent FDI.

 

In an official statement, Apollo Hospitals said, "Apollo and Dr Prathap C Reddy do not have investments in the telecom sector. Sindya securities promoted by P Dwarakanath Reddy and Suneetha have stake in Aircel. Investments of Reddy’s in compliance with all applicable laws."

 

The CBI’s focus at the moment is on the 26 per cent stake in Aircel that Suneetha Reddy has invested in her personal capacity along with her husband P Dwarakanath Reddy. The CBI is expected to call her for questioning on how did Suneetha Reddy acquire 26 per cent at Rs 34.17 crores while Maxis acquired 74 per cent by paying Rs 7800 crores? Is Suneetha Reddy a front for Maxis and Maran?

 

The structure the Maxis funding to acquire Aircel is also under cloud. Maxis has told the Malayasian Stock Exchange in March 2006 that they own 99.3 per cent stake in Aircel.

 

This is through 74 per cent equity and 100 per cent subscription of non-convertible shares in Deccan Digital. Deccan Digital is a stepdown subsidiary owned by Suneetha Reddy’s Sindya Securities and Investments.

 

The major funding has come in from Maxis through preference shares and that is what the CBI wants Suneetha to explain. The Enforcement Directorate is also probing what is clearly a FEMA violation for exceeding the 74 per cent FDI cap.

 

In response to a CNN-IBN send questionnaire to Suneetha Reddy, Apollo Group said, "Apollo Hospitals and Dr Prathap C Reddy do not have any investments in the telecom sector. We further state that the Sindya Securities and Investments Pvt Limited promoted by Mr P Dwarakanath Reddy and Mrs Suneetha Reddy have investments in Aircel Entity."

 

They say the investments have been in compliance with all applicable laws and all regulatory consent.

 

The CBI isn’t buying the argument. Sivasankaran’s statement alleging that Maran arm-twisted him to sell out to Maxis is serious enough. CBI sources have confirmed to CNN-IBN that an FIR against Maran will be filed.

 

After Kanimozhi and A Raja, it is Dayanidhi Maran who will be in the firing line. An FIR is just days away is what the CBI says. And along with the DMK leader, it could be Suneetha Reddy facing collateral damage. A key decision maker with ambitious plans for her group Suneetha Reddy could be questioned by both the CBI and the Enforcement Directorate despite the group distancing itself from the telecom venture. Clearly the 2G spectrum of trouble is only widening.