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Etisalat DB receives $1.58 billion fine

India's Enforcement Directorate hands over fine for 2G auction violations

Etisalat DB receives $1.58 billion fine
Etisalat DB, the Indian subsidiary of UAE telco Etisalat, has been given a $1.58 billion fine for alleged violations related to India’s 2G auction.

Etisalat DB, the Indian subsidiary of UAE telco Etisalat, has been handed a $1.58 billion fine (70 billion rupees) from India's Enforcement Directorate, for alleged violations related to India's 2G auction.

The Enforcement Directorate, which is responsible for enforcing India's foreign exchange management and money laundering laws, said the penalty was for "suspected contravention" of foreign exchange rules inside and outside the country by the company, according to a report from the Press Trust of India (PTI).

The ED said that Etisalat DB, which is a joint venture between Etisalat and India's Dynamix Balwas Group, had violated foreign exchange rules including non-reporting of the receipt of funds from abroad within a stipulated period to the Reserve Bank, according to the report.

Etisalat DB has been given 30 days to explain why it should not pay the fine, according to sources in the ED, the PTI report added.

In a statement sent to CommsMEA, Etisalat said: "Neither Etisalat nor Etisalat DB have received any official communication and is therefore unable to comment at this time. Etisalat is a world-renowned international investor and wishes to reiterate it always abides by the laws and regulations of the markets in which it invests."

In February, Shahid Balwa, vice chairman of Etisalat DB and the managing director of DB Realty, was arrested by India's Central Bureau of Investigation.

A CBI spokeswoman, Vinita Thakur, said at the time that Balwas' arrest was in connection with the investigation into alleged corruption related to 2G spectrum allocation, in which the government is said to have lost up to $39 billion.

Etisalat entered the Indian telecom market in September 2008 when it acquired a 45% stake in Swan Telecom for $900 million.

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