Indian tycoons face grilling over scam

New Delhi - Two of India's top business tycoons appeared on Monday before a parliamentary committee probing a multi-billion dollar telecom licensing scam that has rocked the government.

Ratan Tata, chief of the Tata group, and Anil Ambani, who heads Reliance ADA, arrived late morning for questioning over the allegedly fraudulent distribution of licences in 2008 to top telecom firms, an official said.

Tata's company, Tata Teleservices, was one of the victims of the opaque licensing process according to a police chargesheet, which claims that former telecom minister A. Raja took bribes to favour other companies.

Police charged Raja with abuse of power and conspiracy on Saturday over documented losses of $6.7bn. The national auditor has said total losses could be up to $40bn.

While neither Tata nor his company have been charged, three executives employed by a telecom unit of billionaire Ambani will face trial for their alleged role in the case.

The parliament's Public Accounts Committee, a permanent body comprising lawmakers and retired judges, is leading one of a number of investigations into the scam, potentially the biggest in Indian history.

Under enormous pressure from the opposition, the government has also agreed to form a joint parliamentary committee of 30 politicians who will conduct their own probe.

The Public Accounts Committee will also question Niira Radia on Monday, a media advisor to Tata and a host of other companies.

The telecom scandal has tarnished the reputation of Indian Prime Minister Manmohan Singh and the ruling Congress party as well as raised anxiety about corruption and its impact on business in India.

It has also stymied the government's efforts at economic reforms and led to paralysis in the national parliament.