Sensex fell by 183 points following rumours that the former telecom minister had named a high-profile industrialist to the CBI

THE already-beleaguered BSE Sensex fell by another 183.93 points yesterday to close at the 17,686.

34 mark because of rumours planted around 1 pm claiming that scam-tainted former telecom minister A Raja allegedly sang like a bird in CBI custody.
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Shahid Balwa's lawyer asked the Sessions Court for medical assistance for his client's back pain when he was produced there yesterday

The rumour said he had named a very high-profile industrialist with huge interests in the telecom sector in connection with the 2G scam.

The arrest of Shahid Usman Balwa, a promoter of Swam Telecom, for his alleged involvement in the scam also hit telecom as well as realty stocks.

The arrest also fanned rumours that Balwa is allegedly close to the high-profile industrialist allegedly named by Raja.

"Markets are not always rational. They can react to the most irrational rumours.

After the rumour spread, the market began to sink like a stone," observed Arun Kejriwal, MiD DAY's columnist and founder-director of investment advisory firm Kejriwal Research & Investment Services Pvt Ltd.

By the time the Anil Dhirubhai Ambani Group (ADAG) released an official statement to the media at around 4 pm, the damage was already done and it lost more than Rs 12,000 crore in market capitalisation.

"A series of completely baseless and motivated rumors have been spreadu00a0 today by our unscrupulous corporate rivals.

This has been accompanied by vicious and illegal bear hammering of our listed stocks, to create a panic and destabilise markets.

We have made a formal complaint to SEBI and the stock exchanges to immediately investigate these illegal trades, and take appropriate action to safeguard the interests of our over 11 million investors," the ADAG statement said.

Complaint

Market sources, however, said that this was ADAG's response to another development, wherein Jaipur-based audit firm Parakh & Co, which had examined the books of Reliance Communications as part of a government-ordered probe, approached the telecom ministry for the second time in six months complaining against the group.

In its latest complaint, the audit firm has sought urgent intervention of the telecom department to restrain RCom from adopting coercive tactics against it, and also withdraw proceedings against it at various forums.
An ADAG spokesperson refused to divulge more details of their statement and the complaint filed by them.

Balwa case

A Sessions Judge remanded Shahid Balwa promoter of Swan Telecom arrested in connection with the 2G scam in CBI custody last afternoon.

Judge S C Chadak pronounced his verdict on CBI's application for a two-day transit remand for Balwa to the agency's headquarters in Delhi after the latter made a brief appearance in court.