* Telecom money trail traced to DMK party's TV channel
* Scandal not to threaten coalition government
By C.J. Kuncheria and Ankush Arora
NEW DELHI, Feb 10 Indian police on Thursday
linked a key ally of the ruling Congress party to a
multi-billion dollar telecoms scam, dealing a fresh blow to a
government already crippled by corruption scandals.
A police lawyer told a court companies linked to a telecoms
firm under investigation for buying mobile licences at unfairly
cheap prices had paid 2.14 billion rupees ($47 million) to a TV
channel run by the Dravida Munnetra Kazhagam (DMK), which helps
the ruling coalition maintain its slim majority in parliament.
The main opposition Bharatiya Janata Party, which had
brought parliament to a standstill demanding a probe into
India's biggest corruption scandal, has said Prime Minister
Manmohan Singh's reliance on the DMK prevented him from quickly
probing the case.
The latest court documents come a day after the government
appeared close to agreeing to a broad, cross-party investigation
in the scandal, paving the way for parliament to resume as
normal on Feb. 28 for a session that will see discussions on the
The scam does not threaten the survival of the government,
but it has tarnished Singh's reputation and rattled investors in
Asia's third largest economy.
While scrambling to control the fallout from the scandal,
one of the many during the Congress' second term, the government
is also distracted from policymaking, further delaying crucial
economic reforms such opening up the retail and financial
sectors to foreign investors.
Court documents filed by the Central Bureau of
Investigation, and seen by Reuters, showed that a company linked
to Shahid Balwa, the vice chairman of a joint venture between a
local firm and Abu Dhabi's Etisalat , had given the
money to a TV station what was linked to Andimuthu Raja, the
disgraced telecoms minister who was sacked over the scandal.
Authorities have arrested Raja, a DMK member, and Balwa in
connection with the scandal, in which the government is alleged
to have lost as much $39 billion in the award of second-general
telecoms licences in 2008.
"There was a transaction of about 2.14 billion rupees from
Cineyug Films to Kalaignar TV in the year 2009," the court
The document said Kalaignar TV, which is controlled by the
DMK, was linked to Raja and that the money was given to Cineyug
by firms controlled by Balwa and his relatives
Balwa's laywer, Vivek Aggrawal, told the court the money was
related to a deal Cineyug was considering with Kalaignar TV.
"At the last moment our talks fizzled out. This money has
been returned," he said. DMK officials declined to comment.
Separately, the Supreme Court suggested on Thursday a
special court try all cases related to the telecoms scandal. The
government has two weeks to respond to the suggestion.
(Additional reporting by Devidutta Tripathy; Editing by
Krittivas Mukherjee and Miral Fahmy)