Raja, other executives go on trial; court defers hearing

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NEW DELHI - Former telecoms minister Andimuthu Raja and six business executives indicted in the country's biggest case of corruption went on trial on Wednesday, but the hearing was deferred to settle last- minute bail applications from the defendants.
Andimuthu Raja along with top officials from the Indian joint ventures of Norway's Telenor and the United Arab Emirates' Etisalat, are charged with manipulating the grants of mobile phone licences in the world's fastest growing telecoms market.
Three executives from Reliance ADA, owned by billionaire Anil Ambani, are also on trial for the scandal which may have lost India $39 billion in revenue, according to the state auditor CAG, a sum equivalent to the country's defence budget.
Raja was forced to resign last year and was later arrested, along with several other former government officials and executives.
On Wednesday, Raja and the other defendants pushed their way through a scrum of lawyers, reporters and court officials packed into a small court room in Delhi. The former minister, dressed in a dark safari suit, smiled at the onlookers but did not make any comment.
As Raja entered court, the fate of his regional DMK party was being decided in local elections in Tamil Nadu. Most analysts expect the DMK, a key ally of Congress to lose power because of the backlash from the scandal.
Judge O.P. Saini asked the Central Bureau of Investigation (CBI) to explain why bail should not be granted to the three Reliance ADA officials; Sanjay Chandra, managing director of Unitech which is the local partner of Telenor, and Vinod Goenka, a director of Etisalat's India partner.
The next hearing was set for Friday.
Apart from Raja, police have arrested Shahid Balwa, the vice chairman of Etisalat's India operations and other executives and former government officials.
POLITICAL, ECONOMIC PRICE
Foreign investors are keenly watching whether the telecoms ministry cancels several of the contentious licences issued during that period, a move that will raise doubts about the stability of government contracts and regulations in India.
The scandal is the biggest of the several that have emerged during Prime Minister Manmohan Singh's second term.
They have weakened his Congress-led government, which has been increasingly unable to push forward economic reforms like opening up the retail sector to foreign firms, free up diesel prices or overhaul the tax system.
Two parliamentary panels are probing the scandal and last week, one of them summoned for questioning Reliance ADA's billionaire chairman Anil Ambani, as well as iconic businessman Ratan Tata.
Police say bribes were paid to Raja and undue favours were granted to two firms which are now the Indian partners of Telenor and Etisalat.
The unit of Reliance is accused of setting up Swan Telecom, now Etisalat's Indian partner, as a front company to apply for licences and gain valuable radio spectrum, violating rules that cap cross-holdings amongst telecoms firms at 10 percent.
All of the accused deny any wrongdoing. Telenor and Etisalat have said the events described in the charges predate their investments in India.
Norway's prime minister has written to Singh seeking "fair treatment" for Telenor, saying the firm should not be penalised for "errors others have committed in India."