Karunanidhi’s daughter arrested

[May 20 2011]

An Indian court today ordered Kanimozhi, an MP and daughter of the Tamil Nadu former Chief Minister M.Karunanidhi, into custody over her role in the country’s biggest corruption case, her lawyer said. She is accused of conspiring and accepting bribes to rig 2007/08 grants of lucrative telecoms licences. Judge O.P. Saini rejected her bail application, her lawyer Ram Jethmalani told Times Now television, adding she would likely appeal to a higher court.

The DMK gives Prime Minister Manmohan Singh’s coalition government a slim majority in parliament, but a recent defeat in elections in its bastion state of Tamil Nadu makes it unlikely it will pull out of the coalition.

The scandal may have cost Asia’s third-largest economy $39 billion in lost revenues, equivalent to the defence budget, sparking outrage against the government. Analysts say the scandal cost the DMK the election in Tamil Nadu. This and several other corruption scandals in Singh’s second term have battered the Congress-led coalition government, stymied its agenda for economic reform, and hurt foreign direct investment into one of the world’s fastest-growing economies. Kanimozhi has been charged with conspiracy and receiving bribes along with several of India’s top business executives in the telecoms scandal. She denies the charges.

Her party colleague, the former telecoms minister Andimuthu Raja, has been arrested in the case. Others arrested include executives of Reliance ADA group and Sanjay Chandra, the managing director of Telenor’s India partner Unitech. All accused deny the charges.

The Indian joint venture partners of Norway’s Telenor and of UAE’s Etisalat also are charged in the case. Both of the foreign firms say the events described in the charges predate their entry into India. Norway’s prime minister has written to Singh seeking “fair treatment” for Telenor, saying the firm should not be penalised for “errors others have committed in India.”