Andimuthu Raja along with top officials from the Indian joint ventures of Norway’s Telenor and the United Arab Emirates’ Etisalat, are charged with manipulating the grants of mobile phone licenses in the world’s fastest growing telecoms market.

Three executives from Reliance ADA, owned by billionaire Anil Ambani, are also on trial for the scandal which may have lost India $39 billion in revenue, according to the state auditor, a sum equivalent to the country’s defense budget.

Raja was forced to resign last year and was later arrested, along with several other former government officials and executives.

On Wednesday, Raja and the other defendants pushed their way through a scrum of lawyers, reporters and court officials packed into a small court room in the Indian capital.

As Raja entered court, the fate of his regional DMK party was being decided in local elections in southern Tamil Nadu. Most analysts expect the DMK, a key ally of Congress to lose power because of the backlash from the scandal.

Judge O.P. Saini asked police to explain why bail should not be granted to the three Reliance ADA officials; Sanjay Chandra, managing director of Unitech which is the local partner of Telenor , and Vinod Goenka, a director of Etisalat’s India partner.

Apart from Raja, police have arrested Shahid Balwa, the vice chairman of Etisalat’s India operations and other executives and former government officials.

Foreign investors are keenly watching whether the telecoms ministry cancels several of the contentious licenses issued during that period, a move that will raise doubts about the stability of government contracts and regulations in India.

The scandal is the biggest of the several that have emerged during Prime Minister Manmohan Singh’s second term.

They have weakened his Congress-led government, which has been increasingly unable to push forward economic reforms.

Police say bribes were paid to Raja and undue favors were granted to two firms which are now the Indian partners of Telenor and Etisalat.  All of the accused deny any wrongdoing. Telenor and Etisalat have said the events described in the charges predate their investments in India.

Norway’s prime minister has written to Singh seeking “fair treatment” for Telenor, saying the firm should not be penalized for “errors others have committed in India.”