Court rejects bail for Shahid Balwa in telecoms case

A court on Tuesday rejected for the second time the bail application of Shahid Balwa, the vice chairman of Etisalat's Indian arm, who is charged in the country's biggest corruption scandal.

Balwa is accused, along with others, of rigging a 2007/08 grant of lucrative telecoms licences, causing a loss of as much as USD 39 billion to the state coffers, a sum equivalent to the defence budget.

"Bail applications are without merit and the same are dismissed," Judge OP Saini said in his order.

Thirteen other individuals, including a former telecoms minister and a key coalition lawmaker, and three firms including an arm of Reliance ADA group, are also charged.

The scandal is the largest among the several that have emerged in Prime Minister Manmohan Singh's second term, straining coalition ties and diverting energies away from policymaking and pushing forward reforms.

It has also prompted worries about regulations and governance in Asia's third-largest economy, with the Norwegian prime minister writing to Singh seeking fair treatment for Telenor, whose investments are at risk as its Indian partner is charged in the case.

The court on Tuesday also denied bail to two other executives of DB group, the Balwa-controlled conglomerate which is Etisalat's India partner.

Shares in DB Realty, DB group's listed arm, have lost more than three-fifths of their value since the year began. The Mumbai market is down 12.5%, making it one of the world's worst performing.

All of the accused are in jail pending trail and have denied any wrongdoing. Telenor and Etisalat say the events described in the charges predate their entry into India.