New Delhi, July 8 (PTI): The Enforcement Directorate (ED) today slapped a Rs 7,000-crore penalty on telecom firm Etisalat DB for violating the Foreign Exchange Management Act (Fema) on various fronts in the 2G spectrum allocation scam.

The ED in its complaint filed before the Competent Adjudicating Authority for Fema violations said the penalty had been slapped for “suspected contravention” of foreign exchange rules inside and outside the country by the company.

The adjudicating authority, ED special director Balesh Kumar, approved the order on the probe conducted by the investigating officer of the Delhi zone, Rajeshwar Singh.

Sources in the directorate said Etisalat DB, a joint venture between UAE-based Etisalat and the DB Realty group, had been given 30 days to explain why the company should not be fined Rs 7,000 crore. Among the violations alleged by the directorate is the non-reporting of the receipt of funds from abroad within a stipulated period to the Reserve Bank of India.

Etisalat, as a foreign partner, holds a 45 per cent equity stake in Etisalat DB (former Swan Telecom).

The agency had earlier charged Shahid Balwa-promoted Swan Telecom with committing Fema contraventions worth Rs 3,608 crore.

“This contravention was done by the company in issuing shares to foreign investor and resident investor under an agreement and had issued shares to foreign investor on an abnormal value to avoid the permission of FIPB (Foreign Investment Promotion Board), Government of India,” the ED had said in its complaint against Swan Telecom.

Swan Telecom issued 44.73 per cent shares to Etisalat and 5.27 per cent shares to Genex Exim, according to the agreement on September 23, 2009.

Swan Telecom while issuing shares to foreign investor under the agreement also allegedly contravened the provisions of the laid-down rules prescribed by the commerce and industry ministry by appointing a director who had been nominated by Etisalat.