New Delhi: Asif Balwa and Rajeev Agarwal, two jailed directors of a DB Group company and accused in 2G scam, on Thursday termed as "baseless" in a Delhi court CBI's charge that they could not lend a huge sum of Rs 200 crore to DMK-run Kalaignar TV with its limited paid-up capital.

They said the paid-up capital of Kusegaon Fruits and Vegetables Private Limited, of which both of them are Directors, has no relation to the business they do.

"CBI is saying the paid-up capital of Kusegaon Fruits and Vegetables Private Limited (of which Asif and Rajeev are Directors) is only Rs one lakh and, therefore, it could not have given a loan of Rs 200 crore to Cineyug Films. But the business I do is not related to the paid-up capital," their counsel Vijay Aggarwal told special CBI judge O P Saini.

Both the accused were charge sheeted for allegedly routing over Rs 200 crores illegal gratification from Dynamix Realty to Kalaignar TV Pvt Ltd through Kusegaon Fruits and Vegetables Pvt Ltd and Cineyug Films Pvt Ltd.

DMK supremo M Karunanidhi's wife Dayalu Ammal, his daughter Kanimozhi, a Rajya Sabha MP and Sharad Kumar, Managing Director of Kalaignar TV, holds 60, 20 and 20 per cent stakes respectively in the channel. Kanimozhi and Sharad are also accused in 2G case.

Advancing the arguments opposing the framing of charges against them, Aggarwal said there is no bar that a company, having a paid-up capital of Rs one lakh, could not do business of Rs 200 crore.

"Which law or business practice says that if the paid-up capital is only Rs one lakh, we (Asif and Rajeev) cannot do business of Rs 200 crore," he said, adding CBI had gone for such an argument merely to convince that the Rs 200 crore money was an illegal gratification which was later shown as a loan transaction.

Aggarwal asked if CBI has taken any expert opinion before coming to a conclusion that a company having a paid-up capital of Rs one lakh could not deal for higher amount like Rs 200 crore.

"When CBI is saying that with such paid-up capital, one cannot deal with Rs 200 crore, did it seek expert opinion? The investigating officer of CBI is writing all this like a story. There are thousands of companies whose equity paid-up capital is Rs one lakh but they are doing huge business," he said.

He countered CBI's allegation that transactions related to purported investment by Kusegaon Fruits and Vegetables Pvt Ltd to Cineyug Films and then by Cineyug Films to KTv without due diligence or provision of any collateral, defied commonsense and normal business practices.

"I do not have to learn the normal course of business from CBI. The agency should show that other companies in the same business deal differently or that I deal differently with different companies," he said.

He said all the substantial money was refunded much before the arrest of former Telecom Minister A Raja as against CBI's theory that money came back after his arrest.

"The remand application of Raja does not even mention the transaction of Rs 200 crore to KTv," he said.

He rejected CBI's allegation that no valid agreement was signed between Kusegaon Fruits and Vegetables Pvt Ltd and Cineyug Films for transfer of money and that Cineyug had offered various securities to Kusegaon after the probe began.

The lawyer claimed money from KTv to Cineyug Films was called back after the latter came to know of the contents of June 2009 valuation report of KTv by which the proposed stake to be given to Cineyug Films fell below 20 per cent.

"On one hand, CBI says why did you continue to give the money in August 2009 when the agreement had failed and when the money is taken back once we are aware of the contents of the report, CBI says why did you take back the money. What are we supposed to do?," he said.

(Agencies)