An Indian law enforcement agency has alleged that a “politically and economically powerful” Malaysian was stalling the probe into the controversial acquisition of Indian mobile network operator Aircel by Malaysia-owned telco giant Maxis.

According to a report in Indian national newspaper The Hindu , the Indian Central Bureau of Investigation (CBI) informed the Indian supreme court yesterday that the case involving former Indian Communications and Information Technology Minister Dayanidhi Maran has hit a snag with the Malaysian authorities.

NONE Senior counsel KK Venugopal, representing CBI and the Indian Enforcement Directorate, told judges GS Singhvi and KS Radhakrishnan that the Bureau had completed the domestic investigation, and request letters had been sent to both Malaysia and Mauritius to obtain further information to assist the probe.

The daily reported that during the hearing, Justice Radhakrishnan asked Venugopal: “Do you feel any of the persons named in the First Information Report in the Maxis-Aircel case is delaying the investigation?”

The counsel then replied: “A politically and economically powerful person in Malaysia is delaying the probe. We have sent a Letter Rogatory (request letter) and clarifications had also been given, but a further clarification had been sought from the CBI (by the Malaysian authorities) and they wanted to know whether there is any evidence, which is uncalled-for”.

Venugopal said the Mauritius government was extending full cooperation and the delay was on the part of Malaysia in giving information.

To a question from the judges, he said Malaysia was bound by the Mutual Legal Assistance Treaty, yet there was delay in its furnishing the information.

However he did not name the influential Malaysian.

Former owner: I was forced to sell Aircel

Maxis, Aircel, Maran and several others are being investigated over alleged abuse of power and quid pro quo in granting mobile service licences to Aircel.

The original owner of Aircel, C Sivasankaran has alleged in a statement that Maran delayed granting licences to Aircel and that he was “forced” to sell Aircel to Maxis, which is owned by Malaysian tycoon Ananda Krishnan.

azlan According to the First Information Report registered by the CBI last year, after Maxis acquired 74 percent stake in Aircel in March 2006, the Department of Telecommunications under Maran's ministry issued 14 Letters of Intent to Aircel in November 2006, all of which were converted into licences in December 2006.

Within three months after that, Maxis group invested 800Rs crore (close to RM450 million) in Sun Network, an Indian television company owned by Maran's brother Kalanithi, taking 20 percent of its equity.

Facing allegation that he has misused his position to pressure Sivasankaran to sell Aircel to Maxis, and has favoured Maxis in the granting of licences in return of substantial investment in his family business, Maran resigned as a minister in May 2007.

Malaysia probe important to track money trail

According to another Indian newspaper, The Times of India , the CBI told the Supreme Court that the Malaysia line of probe into the Aircel-Maxis deal was crucial to nail “quid pro quo involved” in Maxis' investment in Sun Network.

azlan The agency said that overseas probe was important to track the money trail as the funds for the deal had come through Mauritius.

"We want to show the link on the source of money to show the quid pro quo involved in the deal," Venugopal submitted.

The judges said that if there was any effort by the "powerful or influential" or if the CBI was working under any influence, then "this must be stopped".

They also recognised that “the allegations leveled and investigations’ prima facie indicates a nexus".

The hearing continues today.