INDIAN police raided a television station linked to the government today, as a widening investigation into a corruption scandal threatens the coalition and scares off investors.
Prime Minister Dr Manmohan Singh is under growing pressure over his role in the illicit sale of mobile phone licences, although he has said he would not resign, blaming the debacle on his sacked telecommunications minister, who is now under arrest.
“Raids have been carried out today on the offices of Kalaignar TV in connection with the 2G scam,” said a Central Bureau of Investigation (CBI) official, who declined to be identified.
The raids followed allegations that companies linked to Swan Telecom, under investigation in the sale of 2G mobile licences, had paid $47m (£28.99m) to the channel owned by the family running the Dravida Munnetra Kazhagam (DMK) party.
The south Indian-based party is a member of Dr Singh’s Congress party-led coalition, helping it maintain a slim majority in parliament. The DMK has declined any wrongdoing, as has Swan Telecom, now partly owned by the UAE’s Etisalat .
The DMK, from the state of Tamil Nadu, is not expected to leave the coalition but the investigation is testing its links with Congress and could put pressure on it to decide whether to stay in the alliance.
The corruption scandal has shaken India’s business elite and shows no signs of abating. Billionaires Anil Ambani and Prashant Ruia have both been questioned by the CBI, something unheard of in India in recent times.
Shares in companies linked to the scandal have suffered.
The CBI is investigating whether Swan Telecom, now renamed Etisalat DB, paid a bribe to the DMK in exchange for the former telecommunications minister and senior DMK member, Andimuthu Raja, giving the company a mobile phone licence.
The government yesterday scrapped another lucrative satellite telecoms contract because of irregularities, dealing a fresh blow to Dr Singh, whose office was ultimately responsible for the deal.
