UPDATE 3-India’s Anil Ambani faces parliament panel in telecom probe

* Ambani firm charged with conspiracy, cheating

* Ambani sought not to answer some questions-panel chair

* Summoning of tycoons to discipline corporate
behaviour-analyst

* Scandal tarnishes reputation of PM Singh, Congress govt

(Adds comments from panel chairman)

By Nigam Prusty

NEW DELHI, April 5 (Reuters) – Anil Ambani, the chairman of
India’s Reliance ADA group, appeared on Tuesday before a
parliamentary panel investigating a multi-billion dollar
telecoms graft scandal that has rocked the country’s political
and business establishment.

Ambani testified days after police indicted officials and a
unit of his group for conspiracy, cheating and other offences
during a flawed 2007-08 telecoms licence grant process that may
have cost the state up to $39 billion in lost revenue.

“Anil Ambani requested that he not be asked anything which
could be used against him in the court case,” the panel
chairman, Murli Manohar Joshi, said at the end of a day that saw
several industry executives testify behind closed doors.

Joshi, however, described the billionaire as
“candid,” and said Ambani had promised to follow up on questions
to which he did not have immediate answers.

The scandal is the largest of several corruption
cases to have emerged in Prime Minister Manmohan Singh’s second
term. It has badly damaged the government’s credibility and set
off worries about regulatory risk in Asia’s third-largest
economy.

While Ambani did not speak to reporters gathered inside the
colonial-era parliament building after his appearance, the
spectacle of some of India’s biggest business names being
questioned is almost unheard of in a country where leading
industrialists have long been seen as untouchable.

The Wharton-educated Ambani, whose ranking on the
recent Forbes global rich list fell to 103 from 36th a year
earlier, appeared a day after tycoon Ratan Tata was questioned
by the same Public Accounts Committee.

Police accuse Reliance Telecom, a unit of Reliance
Communications , and three Reliance ADA officials, of
conspiring to set up Swan Telecom as a front company to gain
valuable radio spectrum. Indian rules bar an existing licence
holder from owning more than 10 percent in another operator in
the same market.

The committee’s recommendations are not binding on the
government but its proceeding could have broader effects.

“This