Shares in realty major Unitech declined as much as 25 per cent on Tuesday after its managing director Sanjay Chandra was embroiled in a fresh controversy. On Monday, investigating agency CBI removed its lawyer in the 2G spectrum allocation scam case for allegedly colluding with Mr Chandra, who is an accused in the scam.
Other companies linked to the 2G scam - Mumbai-based realty firm DB Realty and telecom major Reliance Communications- also saw sharp selling today.
Unitech shares pared losses to close down 18 per cent at Rs 28.75 on the BSE. Unitech was the top traded counter, in volume terms, on the BSE 500, with over 20 crore shares changing hands on the BSE and NSE.
The BSE realty index ended with a 4 per cent cut on account of the sharp selling in Unitech shares. In contrast, the broader Sensex gained 0.52 per cent higher.
DB Realty shares were down by their daily limit of 20 per cent at Rs 98.75 before staging some recovery to close 18 per cent lower at Rs 101. RCom shares ended off the day's low, down 2 per cent at Rs 73.50.
The CBI confirmed that it has removed its prosecutor, AK Singh, based on audio tapes that purportedly reveal him advising Mr Chandra on his legal strategy. Both Mr Singh and Mr Chandra were questioned on Monday, CBI sources said.
A statement from Unitech said that Mr Chandra "wishes to make it absolutely clear that he has never met the prosecutor in the 2G case outside of court or had any phone conversation with him. He denies the suggestion that his voice is on any alleged recording. It appears a fabricated voice recording has been sent anonymously to the CBI." (Read full statement)
The telecom scam is worth Rs 1.76 lakh crore according to the government's auditor or CAG. The government has disputed the price-tag, but the scam tossed Mr Raja, Mr Chandra and several other senior executives into Delhi's Tihar Jail for several months.
Unitech shares have gained substantially over the past few months since the company settled with its Norwegian partner Telenor.
In October 2011, Telenor dissolved its joint venture with Unitech, hoping to distance itself from the 2G scam. Telenor, which owned two thirds of the Uninor-branded venture with Unitech, had blamed the Indian company for the licence cancellation.