Daughter of Singh’s Ally Denied Bail in India Phone-Permit Case

Kanimozhi, daughter of Indian Prime Minister Manmohan Singh’s second-biggest ally, was denied bail by a court in New Delhi in a case related to the 2008 sale of mobile-phone permits.

Judge O.P. Saini dismissed the bail plea of the federal lawmaker and daughter of Muthuvel Karunanidhi, the former chief minister of the southern state of Tamil Nadu, saying the charges leveled against her are of a “serious nature, having grave implications for the economy of the country.”

Kanimozhi was arrested five months ago and charged with conspiring to receive kickbacks for the award of wireless permits.

The scandal has weakened Singh’s government, lowered investors’ confidence, stalled parliament, paralyzed legislation and led to street protests. The government is cracking down on corruption as it is under pressure from social activists and opposition parties to curb official graft and make a stronger anti-corruption law.

Former telecommunications minister Andimuthu Raja and government officials and company executives are on trial on charges they conspired to grant licenses to unqualified companies for personal benefit. All deny wrongdoing. India’s chief auditor put the potential loss to the exchequer at about $31 billion, while the Central Bureau of Investigation said it may have cost the government 220 billion rupees ($4.5 billion).

Decision Reserved

The Supreme Court will announce its decision at a later date on the bail pleas of five company executives-- Unitech Ltd. (UT) Managing Director Sanjay Chandra, DB Realty Managing Director Vinod Goenka, Reliance ADA Group Managing Director Gautam Doshi and Senior Vice Presidents Hari Nair and Surendra Pipara -- of the 14 persons and three companies charged in the spectrum allocation case. Raja has never sought bail.

Raja and Kanimozhi belong to Dravida Munnetra Kazhagam party, which was routed in this year’s local elections in Tamil Nadu. Kanimozhi has been in jail since May 20.

Cineyug Entertainment chief Karim Morani, Kalaignar Television Managing Director Sharad Kumar, DB Realty’s Asif Yusuf Balwa, Shahid Balwa and Rajiv Agarwal, former telecommunication secretary Siddhartha Behura and Raja’s personal secretary R.K. Chandolia were also denied bail byu the court today. Manu Sharma, a lawyer for the accused, said the they will approach the High Court against today’s order.

To contact the reporters on this story: Bibhudatta Pradhan in New Delhi at bpradhan@bloomberg.net; Pratap Patnaik in New Delhi at ppatnaik2@bloomberg.net

To contact the editor responsible for this story: Hari Govind at hgovind@bloomberg.net

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