As going gets tough, RCom compliance officer throws in the towel

As allegations, counter-allegations fly thick and fast at Reliance ADA camp about who is culpable in the so-called 2G scam, senior executives appear to be fleeing the group like a house on fire.

On Thursday, a senior group official — Hasit Shukla, compliance officer and company secretary at Reliance Communications —threw in the towel.

Since mid-April, at least three other senior executives have left Reliance Communications (RCom) and another three senior executives of the Reliance ADA Group — Gautam Doshi, Hari Nair and Surendra Pipara — are in jail, allegedly in connection with corruption in the sale of second generation (2G) telecom spectrum in 2008.

Most of these executives are RCom veterans of several years.

Meanwhile, Satish Seth, believed to be a close confidante of Anil Ambani and group managing director at RCom, reportedly told the Central Bureau of Investigation, which is investigating the 2G scam that Gautam Doshi took all the now-controversial decisions that have embroiled the company in the corruption scandal, a business daily reported on Thursday. He is also said to have claimed that he was a consultant to the group in an attempt to distance himself from those controversial decisions.

Earlier this week, accountants and equity research analysts at some brokerages had frowned at certain accounting policies of the company, which, on Monday, had announced its financial results for the three months and the year ended March 31, 2011.

It is not immediately clear whether the resignation of compliance officer is a related. Indian regulations especially Companies Act and those relating to public listing, have provisions that can hold a compliance officer criminally liable for grave instances of non-compliance.

RCom spokespersons did not respond to queries from DNA regarding the resignation of the compliance officer.

In May S P Shukla, chief executive of the company’s telecom tower arm Reliance Infratel, had quit and in April two other senior executives Arun Sur (president-network) and Jagbir Singh (president, technology & networks) had left the organisation.

Infratel CEO had taken over the reins only in October 2010, after the then chief executive Inder Bajaj resigned. Bajaj’s resignation happened within a couple of months of a botched attempt by the company to sell its tower arm to telecom tower company GTL Infrastructure. The sale was part of RCom’s efforts to ease the debt burden on its books.

In the last week of June, 2010 RCom and GTL made an announcement about the deal and in the first week of September GTL said that the deal has been called off without giving any reasons. In October the then chief executive Bajaj left the organisation, following which Shukla also left in May without completing even a year. RCom still has about Rs32,000 crore debt on its books and continues to look for buyers for its tower arm, but has been unsuccessful as yet.

In an unrelated move, a Delhi court on Thursday dismissed pleas for a direction to the CBI to make Reliance ADAG chairman Anil Ambani, Tata group chief Ratan Tata, corporate lobbyist Niira Radia and DMK chief M Karunanidhi’s wife Dayalu Ammal, as accused in the 2G spectrum scam.

Shares of the company slipped 4.1% on the Bombay Stock Exchange, when the broader market fell 0.62% on Thursday.