The gravity of India’s 2G licensing investigation is becoming increasingly apparent, with another high-profile industry member resigning after being implicated in the scandal.
Shahid Balwa, the head of DB Realty real estate firm and India’s youngest billionaire at age 36, has followed former telecoms minister Andimuthu Raja in stepping down as a result of the scandal.
As one of the most recognised entrepreneurs in India, Balwa’s resignation is an indication of the scandal’s severity. He has been implicated as he is the founder of Swan Telecom, which purchased 13 2G licences in 2008 for a comparatively low sum of INR15.4 billion (US$338 million); shortly thereafter Etisalat purchased a 45% stake in the operator for INR42 billion.
Following this acquisition, Swan was rebranded as Etisalat DB, with Balwa taking on the role of vice-president. He was detained and questioned last month by India’s Central Bureau of Investigation (CBI) but denied any wrongdoing, with DB Realty claiming that his actions had been in no way “inappropriate or illegal”.
Despite this, Balwa’s resignation has been accepted by the real estate firm – a development which saw its share prices drop by up to 15%. Whether Balwa will continue his position at Etisalat DB is currently unclear.
Swan was implicated in the scandal alongside Unitech Wireless (now Uninor), so Balwa’s resignation is being taken as a signal that this operator will be next on the CBI’s hit list. Uninor adopted its new name after selling a stake to Norway’s Telenor – after acquiring licences at notably low rates.