Trial resumes in India’s biggest graft case

A sacked former telecoms minister and six business executives appeared in court on Friday to face trial in India's biggest case of corruption that has exposed the nexus between government and industry in one of the world's fastest growing economies.
The court will rule on the bail applications of officials from the Indian joint ventures of Norway's Telenor , the United Arab Emirates' Etisalat and from India's Reliance ADA group, owned by tycoon Anil Ambani, named in the case.
Former minister Andimuthu Raja and several firms are charged with manipulating the grants of telecoms licences in the world's fastest-growing telecoms market, causing a potential loss to the government of $39 bln.
Raja was arrested last year after the court denied him bail.
As the trial resumed on Friday, the lawyers for the defendants complained that many of the documents they received from the prosecutors were badly photocopied, unreadable or with pages missing.
One of the lawyers brandished a copy of a handwritten witness deposition which the judge acknowledged even he could not read.
"From several statements lines are missing. The documents are haphazard," a lawyer for one of the defendants told the judge O.P. Saini. "Several pages are missing."
The case is the latest chapter in a series of corruption scandals that have embarrassed the Congress party-led government, which faces a test of strength in major state elections that could redraw India's political landscape.
Most analysts expect the DMK, Raja's party and a key Congress ally in the south, to lose power because of the backlash from the scandal.
The new telecoms minister Kapil Sibal could cancel several of the contentious licences issued under Raja, a move that will likely feed investor uncertainty about the stability of government contracts and regulations in India.
The scandal has weighed on the Mumbai stock market, which ended the March quarter as the world's worst performer.
Norway's Prime Minister raised concerns that Telenor may be wrongly penalised in the scandal, and wrote a letter to his Indian counterpart to ensure the firm receives "fair treatment" in the case.
The scams, exposed in recent months, point to a pervasive culture of corruption in Prime Minister Manmohan Singh's administration, prompting a man once seen as India's most honest politician to defend his leadership and scramble to keep the ruling coalition intact.
Under fire from a resurgent opposition, the corruption saga has sapped the government's strength to push an agenda of economic reforms such as simplifying India's tax code or opening its supermarket sector to foreign players.
Wall-to-wall media coverage of what has been dubbed the "season of scams" intensified last week when a social activist went on a fast unto death in the footsteps of Mahatma Gandhi to press the government to tackle corruption.
"Let's start. If we don't, they'll write that I'm not taking this case forward," the judge said on Friday, pointing to the throng of journalists at the trial.
Two parliamentary panels are probing the scandal and one of them summoned Anil Ambani, as well as Ratan Tata, the head of the $70 bln Tata conglomerate for questioning.