A unit of Ambani's Reliance Communications, India's No.2 mobile carrier, and three of his group executives are among those charged by police in a probe into alleged rigging in the license grant process in 2008, which is estimated to have cost the government upto $39 billion.
A police lawyer told the Supreme Court on Thursday the three jailed men had retracted their testimony taking responsibility for decisions made by a unit of Reliance Communications, according to the Press Trust of India (PTI).
PTI reported that Indian federal police were examining Ambani's role in the telecoms licensing case. However, a CBI source told Reuters on Thursday the agency was currently collecting evidence and not yet directly investigating Ambani.
Reliance Group denied on Friday the three charged executives had retracted their statements, adding neither the Reliance Communications unit nor the founder group benefited from telecoms licenses issued in January 2008.
It also said none of the arrested executives had expressed any intention to turn "approver", which is someone who confesses a crime and gives evidence against others.
Shares in Reliance Communications, India's No.2 mobile carrier, and utility Reliance Power, hit record lows, closing down 7.5 percent and 3.9 percent, respectively.
Shares in two other group firms, Reliance Capital and Reliance Infrastructure, fell 12.4 percent and 7.4 percent, respectively. Reliance MediaWorks closed 5.4 percent lower, while Reliance Broadcast lost 13.2 percent.
"After the report that they are going to review the role of Anil Ambani, there is a fear in the market that there could be some action," said R.K. Gupta, managing director at Taurus Asset Management in New Delhi.
"But it is more of a sentimental thing. It is not going to affect the day-to-day operations of the companies," he said.
Reliance Infra, Reliance Capital, Reliance Power and Reliance Communications are the worst-performing stocks in the NSE Nifty index this year. Reliance Infra shares have lost nearly 56 percent of their value so far in 2011, while Reliance Communications is down more than half on the year.
The sprawling telecoms scandal has involved several prominent companies and is the biggest of several to emerge in Prime Minister Manmohan Singh's second term. It has thrown a spotlight on leading industrialists and politicians and slowed Singh's agenda of economic reforms.
The 52-year-old Ambani, India's eighth-richest man according to Forbes, was questioned by police earlier this year. He denies any wrongdoing and has not been charged with any crime.
Police accuse the Reliance Communications unit and the executives of setting up a front company to sidestep rules limiting stakeholdings in telecoms companies. All accused in the telecoms case have denied any wrongdoing.
The police lawyer said the police were trying to establish who the real beneficiaries of the alleged scam were, and said they were looking at Ambani himself, according to PTI.
Reliance Group said there was no evidence to support a police theory of undisclosed beneficiaries.
