Micromax co-founder Rajesh Agarwal arrested by CBI on bribery charges

8 Aug, 2013

Rajesh Agarwal, co-founder of Gurgaon-based mobile handset firm Micromax Informatics Ltd, and Manish Tuli, a senior official of the company, have been arrested by the Central Bureau of Investigation (CBI) on alleged graft charges, according to a report published in the Times of India. The CBI issued an official release regarding the matter, but it refrained from naming Aggarwal and Tuli. Instead, they have been mentioned as 'owner and partner' of a Gurgaon-based private firm.

We had contacted the company for a confirmation on the same and got this official response, "Rajesh Agarwal, co-founder, Micromax has stepped down from his duties and recused himself from the responsibilities. He will focus on the legal proceedings to clear his name of the alleged charges. Following the media reports that owners of Micromax have been arrested by CBI, the company clarifies that Tuli has no association with Micromax and Agarwal was present in his personal capacity with Tuli."

The CBI also arrested three officials of the Municipal Corporation of Delhi (MCD) and an official of Delhi Development Authority (DDA) in the alleged bribery case involving an amount of Rs 30 lakh. The officials were reportedly arrested after being caught red-handed while demanding and accepting the bribe from Aggarwal and Tuli.

It was also alleged that the MCD officials were taking the bribe on behalf of a superintending engineer, an executive engineer, an assistant engineer and a junior engineer (all of them are MCD staff) for granting regularisation for a banquet hall at Wazirpur industrial area in Delhi. The CBI acted on a tip-off that the accused officials of MCD had called Agarwal to a location at Pitampura in Delhi for a part payment of Rs 30 lakh out of a total Rs 50 lakh for which the deal was allegedly struck between the parties.

"The CBI laid a trap and arrested the accused persons, along with the bribe money. Searches were conducted at 15 places. During the search at the house of a junior engineer of MCD, an amount of approximately Rs 40 lakh has been recovered. Similarly, after the search at the residence of one of the arrested accused of MCD, cash amounting to Rs 30 lakh and jewellery have been recovered. The searches are continuing. Further investigation is in progress," read the official release.

The engineers allegedly involved in the case are Rajesh Wadhwa (superintending engineer), AK Singh (executive engineer) and Mahinder (assistant engineer), and a DDA engineer, the TOI report said.

Gurgaon-based Micromax Informatics Ltd manufactures phones, data cards, funbooks and consumer electronics. The firm is backed by investors like Sequoia Capital, Madison India Capital, Sandstone Capital and TA Associates. Last year, Chinese fabless semiconductor firm Spreadtrum Communications Inc. also invested $10 million in the company.

In March this year, the world's biggest telecom network equipment maker Ericsson sued Micromax for alleged patent infringement and refusal to enter into licence agreements related to wireless technology standards such as GSM, EDGE and 3G, according to the Delhi High Court filings. The Swedish firm claimed Rs 100 crore in damages.

Late last month, Sandeep Aggarwal, co-founder and CEO of Gurgaon-based Clues Network Pvt Ltd, the startup that runs the horizontal e-commerce marketplace, was arrested by the Federal Bureau of Investigation (FBI) on insider trading charges. ShopClues is also a VC-backed company and has Helion Venture Partners, Nexus Partners and, a Japanese business group based in Tokyo, as its investors.

(Edited by Sanghamitra Mandal)