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Monday 10 October 2011

Asia Sentinel: Malaysian Tycoon Embroiled in India Scandal; Ananda Krishnan, Friend to Top Politicians, Is Charged in Telecoms Mess

Asia Sentinel
October 10, 2011
Malaysian Tycoon Embroiled in India Scandal    

Ananda Krishnan, Friend to Top Politicians,
Is Charged in Telecoms Mess

by Our Correspondent

Billionaire T. Ananda Krishnan, Malaysia’s richest man, has been
ensnared in the giant telecommunications scandal that has wracked
India and played a major role in fueling the protest led by Anna
Hazare that threatens to bring down the Indian government and change
the nature of politics.

Indian investigators have filed charges against the tycoon and a top
Krishnan executive, Ralph Marshall, along with former Indian
telecommunications minister Dayanidhi Maran and Maran’s brother,
Kalanidhi, according to the Press Trust of India, on charges of
criminal conspiracy over a controversial deal involving the
telecommunications giant Maxis Communications Bhd. and a sister
company of Krishnan’s, Aircel.

Few details have been given of the charges. Local media in Kuala
Lumpur reported that Krishnan’s headquarters said they were aware of
the charges but made no further comment and that the charges would
have no effect on the stock. The Press Trust of India reported that
the Central Bureau of Investigation had filed charges in connection
with the purchase by Maxis of Aircel India in 2006.

A sister company of Aircel invested R6.75 billion (US$137.5 million at
current exchange rates) in the Maran family’s Sun TV DTH venture in
2006, according to a report in the Hindustan Times. Under the terms of
the agreement, Ananda planned to produce TV channels catering to the
Indian market, particularly to the Indian diaspora in the United
States and Europe. Krishnan was said to also be planning TV services
featuring Web-based interactivity.

The 73-year-old Krishnan was listed by Forbes Magazine as Asia’s
second-richest businessman, with US$9.6 billion in assets, behind
sugar king Robert Kuok. Born of Sri Lankan parents in relatively
modest circumstances in Kuala Lumpur, Krishnan’s association with
former Prime Minister Mahathir Mohamad is considered to have played a
major role in amassing his fortune. His publicly traded gaming
company, Tanjong, operates three lotteries in a predominantly Muslim
country that frowns on gambling. He especially endeared himself to
Mahathir by agreeing to become the anchor tenant in the country's
iconic Petronas Towers, owned by the national energy company.

After Mahathir’s departure from power, Krishnan has continued to
remain close to members of the ruling Barisan Nasional, He holds the
title of Tan Sri, one of the highest accolades in Malaysia’s odd
system of titles.

Krishnan has a dizzying number of businesses including media,
satellites, oil and gas, telecommunications and a wide variety of
other holdings involving power generation, gaming and leisure
facilities across a broad swath of Southeast Asia including Singapore
and Indonesia. His MEASAT Broadcast Network Systems boasts three
communications satellites.

It isn’t the first time that Krishnan has found himself in a joint
venture gone sour. In Indonesia, a high profile partnership between
Krishnan's Astro and the Lippo Group's First Media pay TV operation
was unwound and in dispute shortly after it reached the air. That JV,
Direct Vision, ended up in private arbitration in Singapore as the two
sides each accused the other of wrongdoing. Astro sought $250 million
in damages. The arbitration court found in Astro's behalf but the
bitterness reportedly lingers and the two sides have yet to come to a

The telecommunications scandal, involving the licensing of spectrum
for 2G services in 2008, has been cooking in India for more than a
year. So far more than a dozen top businessmen, government officials
and politicians have been implicated, including another former
telecommunications minister, A. Raja, who was forced to resign in
November 2010.

The Indian treasury is said to have lost nearly US$40 billion after
the ministry sold the licenses at 2001 prices on a first-come,
first-serve basis instead of auctioning them as other countries do.
The sale was designed to benefit a select few bidders, according to
the Comptroller and Auditor General of India.

Among those implicated are some of India’s most illustrious companies
including Reliance Communications, run by Anil Ambani, and the Essar
Group, run by the Ruia family. Mukesh Ambani, who runs the separate
Reliance Industries group and is an active rival of his younger
brother, has also been linked to ministers involved.

The prime minister’s office itself has been tarnished by the scandal
as it has come clear that Prime Minister Manmohan Singh knew what Raja
was up to and declined to do anything about it.

The scandal might have disappeared as other corruption scandals have
in India. However, the opposition parties capitalized on the auditor
general’s report to drum up rising public anger. Singh and his
Congress Party political boss, the ailing Sonia Gandhi, who was
recently operated on for cancer in the United States, have both been
attempting contain the crisis with little effect, especially after
Hazare, a 74-year-old retired army driver, went on a hunger strike
that attracted millions of followers. Hazare was jailed but public
outrage soon freed him. One lawyer said he would produce evidence
implicating Robert Vadra, Sonia Gandhi’s own son-in-law.

Hazare’s movement appears to have raised the political temperature
across the entire country, with his hunger strike bringing together an
unprecedented demand for cleanup crossing caste, class, regional and
religious lines, with Hindus and Muslims both demanding reform. There
seems little hope of stemming corruption, however, from officials’
street-level bribes and killings to national scandals – despite the
Hazare movement.

However, according to widespread anecdotal reports, officials at all
levels of government are becoming so frightened of facing corruption
accusations that they are reluctant to make decisions, seriously
delaying policy implementation. 

source: JoyoNews

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