The questioning of one of the foremost titans of Indian
industry comes two days after police made the first indictments in the case,
naming a former minister, a unit of Reliance ADA group and the Indian partners
of Etisalat and of Telenor among the accused.
Neither Tata, ranked No. 61 in the Forbes list of the world’s
most powerful people as head of autos-to-software conglomerate Tata Group, nor
his telecoms firm Tata Teleservices, have been charged in the case.
But an independent lawmaker has said the firm gained from a
2007 policy change in the manner radio spectrum was granted. Tata will answer
questions including those related to the allocation of spectrum, his spokesman
has said. Tata has denied his company received any undue benefits.
The graft scandal, potentially India’s largest, has
tarnished the stature of Prime Minister Manmhohan Singh and fueled doubts that
he will not serve a full term.
It is one of the several corruption scandals that have
emerged during Singh’s second term, hobbling policymaking and diverting the
government’s attention from pushing forward crucial economic reforms.
A dispute between the government and opposition over whether
a parliamentary panel should investigate the scandal paralyzed parliamentary
proceedings for weeks late last year, until Singh caved in to the demands of
his political opponents.
The scandal has also led to several official decisions being
scrutinized or reversed, raising regulatory risk.
Shares in Reliance Communications , DB Realty and Unitech ,
whose units were charged on Saturday, all fell on Monday morning, lagging a
broader market that was in positive territory.
Andimuthu Raja, the telecoms minister during the license
allocations, was forced to resign and has been arrested. He was charged on
Saturday with abuse of official position, cheating and criminal conspiracy.
Tata had earlier backed Raja and the policy changes he made,
saying they “broke the powerful cartel which had been holding back
competition.”
Ahead of Tata’s appearance before the panel on Monday afternoon,
lawmakers will question powerful lobbyist Niira Radia, who has represented Tata
Group companies as well as Tata himself.
India may have lost as much as $39 billion in revenue due to
violation of rules when lucrative 2G mobile phone licenses were granted in
2008, the state auditor has estimated, a sum equivalent to the country’s
defense budget.
The Public Accounts Committee (PAC), the panel which will
question Tata, scrutinizes the accounts of the government and is chaired by
Murli Manohar Joshi, an independent-minded lawmaker from the main opposition
Bharatiya Janata Party.
Anil Ambani, the billionaire chairman of Reliance ADA group,
is due to appear before the panel on Tuesday.
Apart from the PAC, the scandal is also being investigated
by a special cross-party parliamentary committee.
The police investigation is being monitored by the Supreme
Court, which earlier reprimanded Singh for not moving quickly enough to act
against his minister.
Several corruption scandals, which include charges of graft
in the run-up to the 2010 Commonwealth Games and allegations officials at
state-run banks took bribes for corporate loans, have undermined Singh’s image
as a clean and effective leader.
They could also affect the performance of his ruling
Congress party in five state elections across April and May, in which the party
must perform well or risk the coalition unraveling.
The first round of elections began on Monday with the
northeastern state of Assam going to polls.
