By R. Jai Krishna

NEW DELHI--India's federal investigative agency late Monday said it has removed a key prosecutor in the high profile case of alleged corruption in the allocation of telecom licenses in 2008.

The Central Bureau of Investigation said in a statement that it has started a preliminary inquiry to see if the prosecutor discussed strategy with one of the key people accused of being involved in the corruption case.

While the statement didn't give any names, a CBI spokeswoman separately told The Wall Street Journal that the prosecutor is A.K. Singh and the accused is Sanjay Chandra, managing director of real estate developer Unitech Ltd. (507878.BY).

The CBI statement said: "It has come to the notice of the CBI that a public prosecutor was allegedly in touch with, and was discussing certain points regarding prosecution strategy with an accused in the 2G Spectrum allocation case, which is currently under trial."

It added that another prosecutor has been appointed to the team.

Mr. Chandra is currently facing trial for his alleged involvement in improperly getting telecom permits for Unitech Wireless Ltd. He has been charged with criminal conspiracy, cheating the government, forging documents and bribery.

Mr. Singh and Mr. Chandra couldn't be immediately reached for comment.

Unitech said in a statement that Mr. Chandra denies the allegations of being in touch with the prosecutor as well as any wrongdoing in the spectrum allocation case.

"He wishes to make it absolutely clear that he has never met the prosecutor in the 2G case outside the court or had any phone conversation with him," Unitech said.

In October 2012, Norway's Telenor ASA (TEL.OS) ended a nearly four-year-long telecommunications venture with Unitech.

This came after India's Supreme Court in February 2012 revoked the licenses of several telecom companies, including all the permits held by the Telenor-Unitech venture, citing irregularities in their allotment in 2008.

Telenor had bought its majority stake in the venture, Unitech Wireless Ltd., after the Indian company got the licenses.

While Telenor blamed Unitech for the license cancellations, the local company denied any wrongdoing.

Write to R. Jai Krishna at krishna.jai@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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