Asif Balwa and Rajiv Agarwal were arrested on Tuesday in connection with the telecoms probe, a spokeswoman for India’s federal investigative agency said.
They are the latest of several arrests, including former telecoms minister Andimuthu Raja, in a scandal that has sparked opposition calls for the resignation of Prime Minister Manmohan Singh, halted economic reforms and worried investors in Asia’s third largest economy.
The state auditor has estimated India lost up to $39 billion in revenue due to irregularities when licences were granted in 2007-08 at rock bottom prices in return for kickbacks. The report forced the resignation and arrest of Raja.
The two arrested on Tuesday are executives w ith real estate firm DB Realty, according to the company’s latest annual report as well two people with direct knowledge of the matter.
Balwa is the brother of former DB Realty Managing Director Shahid Balwa, who was arrested in February in connection with the telecoms investigation.
DB Realty’s parent DB Group is Etisalat’s India mobile joint venture partner.
Police lawyers earlier in court accused Raja, the former telecoms minister, of having taken bribes from firms which are now the Indian arms of Telenor and Etisalat to grant them lucrative mobile phone licences.
DB Reality declined comment on Tuesday. All of those previously arrested have denied any wrongdoing.
Police will file formal charges in the telecoms case by Thursday in a lower court.
The opposition has called for Singh’s resignation and halted parliament, effectively blocking economic reforms such as freeing up diesel prices and allowing foreign investors into the supermarket sector.
The scandal has touched the very top of Indian society, including some of the stars of India’s economic boom once seen as untouchable. Police have questioned businessmen including Anil Ambani, the billionaire chairman of the Reliance ADA Group.
Notices have gone out to telecoms firms asking why their licences should not be canceled, sparking questions about regulatory stability.
On Monday, a parliamentary panel probing the scandal called top Indian tycoons Ratan Tata and Anil Ambani to depose before it.
The scandal has weighed on the benchmark Mumbai stock market , which is down 7.6 percent since the beginning of the year, underperforming the MSCI’s broader emerging markets equities index , which has gained 2.4 percent.
The corruption scandals, which include charges of graft at the 2010 Commonwealth Games and of officials at state-run banks taking bribes for corporate loans, have tarnished Singh’s image as a clean and effective leader.
They could also affect the performance of the ruling Congress party in five state elections that begin in mid-April, in which the Congress must perform well or risk the coalition unraveling.
