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Investigating India’s biggest scam

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Here is the latest in the disappearance of Rs. 1,760,000,000,000 of public money. That was your money until Raja and the rest of the government gave it away to a few favoured industrialists.

The Public Accounts Committee of the parliament is not public. The website of the Indian parliament does not list the current chairman (other sources reveal that the post is now held by Murli Manohar Joshi, BJP) and the link to the constitution of the present committee is broken. This august and unknown body is in the news today. The report from the Hindu states:

The PAC, headed by BJP veteran Murli Manohar Joshi, took the decision to ask the CAG to appear before it at its last meeting earlier this month. It has already obtained some information from the Department of Telecommunications, the Finance Ministry, the Telecom Regulatory Authority of India and experts in the telecom sector through oral depositions and written submissions. The Parliamentary Committee, which is examining the issue of 2G and 3G spectrum as part of an overall review of recent developments since June, has so far been briefed by the former TRAI chairpersons, Nripendra Mishra and Pradip Baijal, and the former Telecom Secretary, Siddharth Behura, among others.

Mr. Behura is understood to have told the panel that all decisions were taken by Mr. Raja, and he just carried out orders.

The report also summarizes the story so far:

The Opposition, including the Bharatiya Janata Party and the Left parties, had been demanding a Joint Parliamentary Committee to probe the issue in depth. Describing it as the “biggest scam in Independent India,” the Opposition insisted that only a JPC probe could unearth the entire truth.

The tug of war between the government and the Opposition led to the stalling of almost the entire winter session of Parliament and the resignation of Telecom Minister A. Raja. The government continued to stoutly oppose a JPC probe on the ground that it had already initiated “multi-faceted” action against those involved. The setting up of a JPC would “only delay the inquiry and politicise the matter.”

It, however, agreed that Prime Minister Manmohan Singh would appear before the PAC. Dr. Singh made the offer on the concluding day of the 83[rd] plenary session of the Congress party here on Monday. Accusing the BJP of indulging in “false” propaganda that the government was opposed to the JC as it did not want him to be questioned by it, Dr. Singh said he intended to write to the Chairman of the PAC that he was ready to appear before it if it wanted.

WSJ reports the other entertainment program which the government of India is putting on:

Indian investigators Friday staged raids at the residences and offices of the head of the Commonwealth Games organizing committee after alleged irregularities in the run-up to the sporting event and also began questioning former Telecommunications Minister Andimuthu Raja in connection with the controversial allotment of telecom licenses and bandwidth.

Kalmadi should have been investigated three months ago and Raja three years ago. As many times before, the culprits had enough time to cover their tracks.

Dec 28

More on the continuing saga from the Hindu:

Chairman of the Parliament’s Public Accounts Committee Murli Manohar Joshi said here on Monday that Comptroller and Auditor-General of India Vinod Rai, who appeared before the panel to give his views on the 2G spectrum allocation scam, told the PAC that the “presumptive loss” figures were arrived at using the “best practices” applied internationally.

Referring to Prime Minister Manmohan Singh’s letter to the PAC offering to appear before it, Dr. Joshi said: “The PAC has no power to summon any Minister…But this case is different because the Prime Minister has himself offered to appear. This is not a case of summons.”

During the PAC meeting, Congress members reportedly insisted that Dr. Singh be called for “consultations,” while non-UPA members are believed to have cited rules and procedures to claim that they do not permit the Prime Minister’s appearance before the committee.

On the BJP’s demand for a JPC to probe the issue, Dr. Joshi said the PAC Chairman did not belong to any party. “It [JPC probe] was for the government to decide…that does not come within our purview.”

The investigation is now mired in dirty politics. Mr. Joshi may yet have the opportunity to get even with the party which sidelined him.

More details are reported by TOI:

Comptroller and Auditor General (CAG) Vinod Rai on Monday defended the estimate that the spectrum allocation under A Raja caused the exchequer a loss of Rs 170,000 crore in face of arguments of UPA members of Parliament’s Public Account Committee that the finding was presumptive and based on hindsight.

According to sources, Congress members Ashwini Kumar and K S Rao along with DMK’s T Shiva raised doubts about the findings of the PAC — an estimate that led Congress leadership to oust Raja as the telecom minister and intensified the political tussle with the opposition.

Defending his estimate, Rai is learnt to have forcefully argued that the criticism does not hold because an audit by very definition is a post-facto examination of accounts. He also stated that all estimates of CAG or revenue losses are presumptive and yet they have so far been accepted by the government.

[Yashwant] Sinha and other opposition members asked the [sic] Rai to explain the disconnect between Raja’s claim that he followed the first–come first-served policy, and CAG’s finding that he didn’t. The former finance minister, according to sources, also asked the CAG to shed light on former telecom secretary D S Mathur’s recusal from decisions on spectrum licenses as well as that of the then financial adviser to take voluntary retirement because of the pressure brought to bear upon him.

Now we can collect more names of members of the PAC: chair Murli Manohar Joshi (BJP), members Yashwant Sinha (BJP), Ashwini Kumar (Congress), K. S. Rao (Congress), T. Shiva (DMK).

HT has a piece which compares a Joint Parliamentary Committee (JPC) probe with that by the Public Accounts Committee (PAC):

The PAC is constituted every year to scrutinise how the money sanctioned by Parliament has been spent by the government. It takes references only from the government auditor report, which limits its role.

The composition and functioning of a JPC, a structured but ad hoc committee, are governed by Parliament. It is set up for probing a specific issue and its duration is limited. Such a committee is set up by a motion passed in Parliament. Its terms of reference depend on the motion and this is not limited to the scrutiny of government finances.

Both the JPC and the PAC can only look at documents and examine ministry officials who testify before them. They can arrive at independent conclusions based on their probe.

The PAC expresses no opinion on points of general government policy, but it is within its jurisdiction to point out whether there has been a financial loss to the exchequer in carrying out that policy.

The mandate of a JPC depends on the motion constituting it. Its recommendations have persuasive value but it cannot force the government to take any action. Many past JPC reports have been ignored by the government of the day. The government can decide to conduct its own investigations on the basis of a JPC report. But it has to report to Parliament on the follow-up action on the JPC recommendations.

Jan 11, 2011

IE reported the dim view that the Supreme Court takes of the 2G Spectrum Scandal:

The Supreme Court effectively closed in on A Raja on Monday when it decided to examine the 2008 spectrum allotment “irregularities” during his tenure as Telecom minister, by issuing notices to the Union government and 11 companies on an NGO’s petition seeking cancellation of the 2G licenses.

Given that Raja’s present successor Kapil Sibal sought to prove late last week that the 2G allotment loss to the nation was zero, a two-judge Bench also said it would ask the government to arrive at the exact figure, if any, but observed it cannot take cognisance of the official auditor’s estimate of Rs1.76 lakh-crore as it did “not form part of the record”.

The Telecom Regulatory Authority of India (TRAI) became the chief target of the day as Justices G S Singhvi and A K Ganguly hurled a volley of questions over why the government-founded regulator of telecommunications business in the country failed to act when the telecom firms that secured licences in early 2008 failed to roll out the spectrum within a year of it.

The companies that have been issued notice are Etisalat, S-Tel, Uninor, Loop Telecom, Videocon, Allianz Infra, Idea Cellular, Tata Teleservices, Sistema Shyam Teleservices, Dishnet Wireless and Vodafone-Essar.

In the meanwhile Mr. Kapil Sibal claimed that there was no loss to the exchequer from the 2G Spectrum Scandal. Monecontrol reports a superb interview of Mr. Sibal by Karan Thapar:

Q: At your press conference on Friday the 7th, you said first that the realistic figure for the loss was something slightly over Rs 17,500 crore, but in the very next breath you said there was no loss at all. Which is it, a loss or no loss?

A: You can calculate losses without reference of benefit. In a balance sheet what happens, there is a cost and there is a benefit. In every policy framework there is a cost and there is a benefit. If you look at the benefits to the consumer, they far exceed the revenue loss.

Q: So what is your position? Is there a loss or not?

A: My position is if you don’t take the benefits you can calculate the losses to any extent you want. But if you look at the benefits, there are no losses.

Q: So that is your position if you look at the benefit to the consumer, there is no loss to the public exchequer. I am getting you to clarify this because it’s so important. You are saying if you look at the benefit to the consumer, there is no loss whatsoever to the public exchequer?

A: Absolutely. Let me just extrapolate this a bit. There are three public goods that need to be served through any public policy, right, especially in a commercial area like this. Number one, benefit to the consumer, second, benefit to exchequer and three, the larger social good, in other words the policy of transparency to make sure that the industry is competitive.

So, industrial competitiveness, benefit to the consumer and benefit to the exchequer. If you look at all these three and all these three should lead to public good. In other words you cannot benefit the consumer so much that you destroy the industry; you cannot benefit the exchequer so much that you destroy the consumer.

Q: I just want to reiterate and repeat, your position is that there is no public loss to the exchequer.

A: Absolutely. If you look at it in cost benefit terms, there is no public loss.

Q: If there is no public loss to the exchequer, how do you explain and account for the fact that companies like Swan & Unitech made windfall profits allegedly to the extent of USD 2 billion within weeks of getting the spectrum and without starting operations?

A: Remember, when disinvestment took place in the NDA time and Centaur Hotel was sold and within a month or so it was sold for Rs 30 crore more.

Q: Do you remember the criticism Mr Shourie and BJP faced for that.

A: Whatever.

With that single last word Mr. Sibal expresses the complete rock-bottom apathy of the government towards public good. Caesar’s wife indeed, Mr. Manmohan Singh.

Jan 21, 2011

An ex-lawyer like Sibal should have known better. Now the Supreme Court has come down heavily on Mr. Sibal, as TOI reports:

The Supreme Court on Friday directs CBI to carry out investigation into 2G spectrum scam without being influenced by telecom minister Kapil Sibal’s views.

On Kapil Sibal’s statement that CAG’s estimate of loss in 2G scam was utterly erroneous; the SC said that the minister must behave with some responsibility. His statement will have no bearing on CBI investigations.

On CAG report, the Court said that minister’s statement that no loss happened was very unfortunate.

The SC also issues notice to all 11 telecom firms who got spectrum during A Raja’s tenure on Subramanian Swamy’s petition seeking cancellation of all irregular mobile licences. On Swamy’s plea for restraining the telecom ministry from accepting the fines to condone mobile licence agreement violations by companies, the SC said it will consider it [once] Swamy makes a written plea.

ET reported:

On a day when the PAC took its battle against Kapil Sibal to Lok Sabha Speaker Meira Kumar, asking her to take “prompt” and “effective” steps to stop the commission of “constitutional impropriety” by ministers, the Supreme Court added to the telecom minister’s woes by describing his attack on the CAG “unfortunate” , and asked him to behave “responsibly” .

The court expressed displeasure over Sibal’s statement after petitioner Janata Party president Subramanian Swamy said the minister’s actions may influence the SC-monitored CBI probe. Faced with the combined onslaught of the SC and the PAC, Sibal said he had never intended to show “disrespect” to any institution.

“This (public response to CAG) meant no disrespect to any institution. Neither directly nor indirectly was it an attempt to interfere with any process going on in government or in the investigation agencies ,” Sibal said. Referring to Parliament’s washed-out winter session due to resistance from the Opposition, Sibal said the government had been left with no option. “I think it is the duty of the government, if it has no access to any forum, to at least place its point of view before the public.”

“I am fully aware of my responsibilities, my obligations, my duties not only as a minister but also as a citizen of this country ,” Sibal said but added that “canards” being spread on the report had to be responded . Sibal, at the same time, took a dig at the Opposition and cited the letter written in 2002 by the then defence minister George Fernandes, while responding to the CAG report on the Kargil aluminium casket scam. “He had sent copies of an article written on the issue by journalist RV Pandit to all the MPs, with a note written at the end — what happens to the country when the culprit is the CAG,” the telecom minister pointed out.

As a natural corollary, the court on Friday directed the CBI to go ahead with the probe into the scam without getting influenced by any body’s statement.

Jan 23, 2011

The obvious next step followed. TOI reports:

A special CBI judge on Saturday summoned comptroller and auditor general (CAG) Vinod Rai and a senior audit official to depose as witnesses in a case seeking prosecution of former telecom minister A Raja in the 2G spectrum scam, auguring more trouble for the Centre.

The CAG will be asked about its report that said 2G mobile spectrum was sold cheap in 2008 to ineligible firms, resulting in presumptive losses adding up to Rs 1.76 lakh crore. This is the basis of former MP Subramanian Swamy’s petition against Raja.

CAG’s findings have been vigorously challenged by the government which says the loss estimates are incorrect and that there is nothing amiss in the first-come-first-served policy under which licences were issued to telecom operators. The CAG now can place its arguments in court.

“We have not received the document. After we receive it, we will decide how to go about it,” a CAG spokesperson was quoted as saying in an agency report. The Supreme Court is already monitoring a CBI probe into spectrum allocation.

While the government is probing irregularities in allocation, it is contesting CAG’s loss estimate which implies a failure of oversight.

Jan 30, 2011

The Hindu reports the government’s latest efforts to right the laws:

Scarce spectrum would not be offered free of cost and all operators would have to obtain radio waves through a market-driven process, Communications and Information Technology Minister Kapil Sibal said here on Saturday. He, however, clarified that the new operators who got licences in 2008 would be asked to pay beyond 4.4 MHz start-up spectrum, while the incumbent service providers would have to pay beyond 6.2 MHz radio waves.

Giving the broad contours of the new telecom policy being framed by the Department of Telecommunications (DoT), Mr. Sibal said: “In future, the spectrum will not be bundled with licence… there will be no concept of contracted spectrum and, therefore, no concept of initial or start-up spectrum. Spectrum will be made available only through a market-driven process.”

At present, 4.4 MHz of 2G spectrum comes bundled with a licence, while the operator is entitled to an additional 1.8 MHz after he achieves a certain number of subscribers in a telecom circle. The pan-India 2G licence fee as per the existing policy is Rs.1,658 crore.

“As per the proposed policy, the licence to be issued to telecom operators will be in the nature of ‘unified licence’ and the licence holder will be free to offer any of the multifarious telecom services. However, if a licence holder wants to offer wireless services, he would have to obtain spectrum through a market-driven process,” Mr. Sibal explained.

Jan 31, 2011

CNN-IBN reports:

The one-man committee of Justice Shivraj Patil, looking into the 2G spectrum scam has named former telecom minister A Raja for procedural lapses. Former Department of Telecom secretary Sidhartha Behura has also been named in the report along with RK Chandolia, former personal secretary to Raja.
The report, which was submitted by Justice Patil to Telecom Minister Kapil Sibal on Monday, also names seven Department of Telecom officers along with Raja.

The Committee was set up by Kapil Sibal to investigate into the 2G spectrum scam and to investigate allegations against Raja and whether telecom policies were flouted to benefit a few service providers.

Feb 2, 2011

BS reports:

One terse sentence brought a chapter of the 2G spectrum scam to an end at 3 pm this afternoon. An officer of the Central Bureau of Investigation (CBI) told former telecommunications minister Andimuthu Raja, “Mr Raja, you are under arrest,” after four hours of questioning for the fourth time this month.

Raja’s arrest followed the interrogation of his brother, A K Perumal, about the funding of some front organisations owned by telecom companies, which had been issued 2G licences between October 2007 and January 2008.

Raja’s former personal secretary, R K Chandolia, and former telecom secretary Siddharth Behura were also arrested for allegedly abusing their official positions and manipulating tendering procedures to benefit certain telecom companies.

As Raja belongs to the Dravida Munnetra Kazhagam (DMK), an ally of the ruling United Progressive Alliance (UPA), and contributes 18 MPs out of 40 from Tamil Nadu-Pondicherry, there had been some misgivings in the government that the arrest could impact its stability. The UPA has 259 MPs in a House of 543. If the DMK were to walk out of the government in protest against the arrest of one its MPs, the UPA would slip into a minority.

However, immediately after news of the arrest, DMK chief M Karunanidhi went into a meeting on tenders for the free TV scheme that the state government has launched and barred reporters from the venue. Karunanidhi’s alder son, Azhagiri, who has been critical of the role played by Raja, told associates that he had suggested to his father that Raja be suspended from the party. In response, Raja had been removed from his post as propaganda secretary. But there was no reaction from the party — not even mild condemnation of the Centre’s move.

Feb 7, 2011

CNN-IBN reports more on the deep roots of the 2G spectrum scandal:

Former telecom minister A Raja is in CBI custody for two more days and already there are allegations about the role of others in the DMK in the 2G scam. Janata Party Chief Subramanian Swamy had said that he has records of people from Swan Telecom who have met DMK Chief M Karunanidhi. Karunanidhi sent a legal notice to Swamy on Sunday to retract the allegations within 24 hours.

But documents with CNN-IBN show that money was loaned by DB Realty group to DMK’s Kalaignar TV through a maze of transactions.

DB Realty is owned by Shahid Balwa who has a stake in Swan Telecom which is one of the companies named in the 2G scam.

CNN-IBN has accessed the balance sheets of three companies to establish that loans were made to Kalaignar TV. Karunanidhi’s wife MK Dayalu owns 60 percent and daughter Kanimozhi owns another 20 percent in the DMK TV channel.

Rs 214.84 crore is reflected in Kalaignar TV’s balance sheet as an unsecured loan. It comes from Cineyug Media and Entertainment Pvt Ltd and the exact amount is Rs 214.8654 crore. It is given to Kalaignar TV as an unsecured loan in the company’s balance sheet for the year 2009-2010.

Feb 9, 2011

BS reports:

Swan Telecom and Unitech Telecom companies had together caused a loss of over Rs 7,000 crore to government exchequer as both had offloaded their shares for hefty sums after getting the 2G spectrum, alleges CBI.

With the arrest of Shahid Usman Balwa, promoter of Swan, the focus of CBI is now on officials of Unitech who had been instrumental in getting the Unified Access Licences (UAS) during September 2007 and January 2008.

In a five-page FIR, CBI said the officials of the Department of Telecom and some private companies entered into a criminal conspiracy and caused wrongful gains to themseleves.

It said M/s Unitech was alloted UAS licences for 22 cricles for Rs 1658 crore. “It offloaded its 60% of shares in the licenses to Telenor of Norway for Rs 6,100 crores even before the roll-out,” the FIR said.

Similarly, Swan was alloted UAS licences for 13 circles for Rs 1,537 crore and it sold 45% of shares before roll-out to UAE-based Etislat for Rs 4,200 crore.

“The estimated loss to the governemnt by grant of licences to these two companies alone comes to Rs 7,105 crore. On pro-rata basis, the estimated loss for all the 122 circles is more than Rs 22,000 crore,” the FIR said.

Feb 11, 2011

The ET led off with one detail from an interim report of the CBI:

Trouble seems to be mounting for former telecom minister A Raja with the investigating agencies pegging the bribes and kickbacks involved in the 2G scam at as high as 3,000 crore.

The CBI and the Enforcement Directorate , which submitted their status reports to the Supreme Court on Thursday, said the former minister deviated from the “first come first served” policy to favour firms close to him.

Raja has been claiming that he had scrupulously followed “first come first served” policy. The status report has kicked the bottom of this claim. The former minister is also accused of tampering with documents for helping companies involved in the scandal. Raja has been charged with entering into criminal conspiracy, forging of documents and cheating.

The Hindu carried a more detailed report from the court:

The Central Bureau of Investigation on Thursday informed the Supreme Court that it would complete the investigation in the 2G spectrum case and file a charge sheet in the competent court by March 31.

Senior counsel K.K. Venugopal, appearing for the CBI gave this assurance before a Bench of Justices G.S. Singhvi and A.K. Ganguly, hearing the case.

The Bench, while taking on record the status reports filed by the CBI and the Enforcement Directorate, barred any other court in the country from passing any order which could impede investigation of the case.

Mr. Venugopal submitted that investigation into the money trail abroad would be completed by May 31. When he sought a month’s time to inform the court as to what action the CBI proposed to take against the beneficiaries, Justice Singhvi said, “We will scrutinise the draft charge sheet before it is filed in the special court.”

Earlier counsel Prashant Bhushan, appearing for the Centre for Public Interest Litigation, pointed out that the agencies had not questioned the heads of several companies including Swan Technology, which was controlled by Anil Ambani’s Reliance Group, when the spectrum was allocated. He also alleged that the CBI had left out many corporate houses involved in the scam.

Justice Ganguly told Mr. Venugopal: “Top authorities of the companies were not questioned. It is surprising that the Managing Directors were not summoned. Why has the CBI not taken any action in this regard?”

Justice Singhvi wanted the CBI to probe why Finance Ministry officials were not consulted when the decision on allocation of spectrum was taken by changing the policy. The judge said: “This is the starting point. The exclusion of Secretary, Ministry of Finance, at the most crucial stage and why four important persons who really mattered were excluded must be probed.”

Feb 14, 2011

TOI reports:

DB Realty, the firm promoted by Shahid Balwa who is in CBI custody for his role in the 2G scam, is also being investigated by Delhi police for receiving secret information from tainted IAS officer Ravi Inder Singh, who was posted in the home ministry.

In its chargesheet filed against Singh last month, Delhi police said the MHA (ministry of home affairs) official and his associate Vineet Kumar passed on information to DB Realty and other firms. The chargesheet (TOI has a copy) said, “Vineet Kumar (CMD of Kolkata-based Temptation Food Pvt Ltd) was in touch with Ravi Inder Singh to get the file of DB Realty cleared from the home ministry. Singh passed on information to Vineet regarding movement of the files, notings by officers and status of those files.”

Singh was arrested by Delhi police’s special cell on November 23, 2010 along with Vineet, his agent. A chargesheet was filed against the duo on January 22 this year. Singh was accused of passing on sensitive information to several private telecom companies.

Hindu Business Line reported extended custody of Raja and Balwa:

A Delhi court, hearing the 2G case, on Monday extended the CBI custody remand of the former Telecom Minister, Mr A. Raja, to February 17 and that of Mr Shahid Usman Balwa, ‘Director’ of Swan Telecom, to February 18.

The Special CBI judge, Mr O.P. Saini, said, “Considering the enormity of crime, complex and complicated nature of the investigation, voluminous documents involved in the case, I find that the prayer (by CBI) for further custodial interrogation of the accused persons is justified.”

The CBI had alleged that the accused conspired in 2G spectrum licence allotment and caused losses of Rs 22,000 crore to the exchequer. It said Mr Raja showed undue favour to Swan Telecom in the grant of 2G licences, adding that the duo’s interrogation could not be completed due to their evasive replies.

The CBI’s comment is odd. Surely they did not expect the two accused to spill the beans the moment they are questioned. Does this show an inability to investigate a case?

Feb 15, 2011

Sanjay Chandra of Unitech was questioned, according to NDTV:

The Central Bureau of Investigation (CBI) today summoned Sanjay Chandra of Unitech for questioning in the 2G spectrum allocation scam.

This comes a week after the arrest of Swan Telecom promoter Shahid Balwa.

The CBI also has summoned top officials of telecom companies that got 2G licenses. The CBI has called officials of Tata Realty, Loop and Unitech for questioning in the case.

CBI on Monday went to the court with new charges against the 10 private players that were favoured by former telecom minister A Raja for 2G licences.

In another development, the CBI conducted raids on Niira Radia’s offices, as TOI reported:

The CBI on Wednesday raided the homes and offices of business lobbyist Niira Radia, former telecom regulatory chief Pradeep Baijal and relatives of former communications minister A Raja over the 2G spectrum row.

In a coordinated operation, Central Bureau of Investigation (CBI) officials searched the New Delhi homes and offices of Radia, whose intercepted telephonic conversations showed her lobbying for Raja when a new government came in last year.

CBI deputy inspector general of police Vinita Thakur said that officials landed up at Radia’s Sainik Farms house in south Delhi as well as her plush office on Barakhamba Road in the heart of the city in the morning.

Feb 16, 2011
Here is an analysis of the prime minister’s press meet where he addressed this issue. Interestingly, the news desk interviewing the channel’s editor, Jehangir Pocha, forms the major part of this item.

The same Jehangir Pocha is heard here talking to Niira Radia. If Radia can dictate stories to the channel, then perhaps there could be hidden motives behind the above analysis of the prime minister’s speech. The existence of such motives does not, of course, invalidate all parts of the argument.

In a related development, FT reports on the summons to Anil Ambani by the CBI:

Anil Ambani, the Indian billionaire whose telecoms group is under scrutiny as part of an acrimonious spectrum licensing probe, has met anti-corruption investigators in the latest twist in a scandal that is unsettling investors.

A spokesman for the majority owner of Reliance Communications, India’s second-biggest telecoms group by subscribers, said Mr Ambani attended the police’s Central Bureau of Investigation headquarters in New Delhi on Wednesday “to clarify ongoing issues, relating to telecom matters for the years 2001 to 2010”.

The agency, which has summoned executives from several companies in the sector as part of its investigations, issued no summons to Mr Ambani, the spokesman said.

The CBI could not be reached for comment, but his meeting with its investigators was the first by any of the tycoons who dominate the scandal-prone sector in connection with the inquiry.

The probe concerns the allocation of scores of second generation (2G) mobile network licences in 2008 at what the national auditor subsequently described as “throwaway prices”. The auditor said the undervaluation cost the exchequer up to $39bn in lost revenue, a figure disputed by the government.

The auditor claimed that RCom had violated licensing regulations in 2008 by holding a larger-than-permitted stake in Swan Telecom, a smaller operator that was also applying for a licence.

Feb 17, 2011

HT was drawn into the drama surrounding A. Raja’s judicial custody:

Former telecom minister Andimuthu Raja (47), remanded to judicial custody by a city court in the 2G Spectrum and licences allocation scam, will share a 15feetX10feet room with suspended Indian Police Service (IPS) officer RK Sharma for the next two weeks. Raja is lodged in a VIP ward in Tihar Jail’s sub-jail number 1, comprising 35 inmates in five rooms.

Sharma, Raja’s roommate, was convicted by a fast track court in 2008 for the murder of journalist Shivani Bhatnagar in 1999. The room has an attached bathroom.

In the adjacent rooms at the VIP ward, Raja’s neighbours include suspended Indian Administrative Service officer Ravi Inder Singh and suspended assistant commissioner of police SS Rathi. While Singh was chargesheeted by the Delhi Police for allegedly passing sensitive information of the ministry of home affairs to unauthorized persons, Rathi was convicted in 2007 for killing two in Connaught Place.

Among Raja’s neighbours is convicted Pakistani national Mohammed Aarif alias Ashfaq, an alleged LeT operative, convicted in Red Fort attack.

This is drama. Mr. Raja has not been convicted. He is in judicial custody during interrogation. Why is he in Tihar jail? In some future time when the case collapses, the government can still claim that they sent Raja to jail.

HT reported elsewhere on the questioning of Anil Ambani and Prashant Ruia (of Essar) by the CBI:

Anil Ambani, chairman of the Anil Dhirubhai Ambani Group (ADAG), is now a suspect in the 2G scam, CBI sources have told HT. The investigators are not satisfied with his responses during the questioning session in the CBI headquarters here on Wednesday. An ADAG spokesperson, however, refused to reply to HT’s queries on the issue.

As part of the CBI plan to question the bosses of all the companies that got UAS licences during former telecom minister A Raja’s regime, the agency called Prashant Ruia, CEO and MD of Essar group, on Thursday.

Ruia was asked about the alleged role of his group in Loop Telecom that got licences in 21 circles in January 2008. Loop CEO Sandip Basu was already questioned in this regard.

Feb 18, 2011

TOI reported that Shahid Balwa was also remanded to judicial custody:

Swan Telecom promoter Shahid Usman Balwa, arrested for his alleged involvement in the 2G spectrum scam along with former telecom minister A Raja, was on Friday sent to Tihar Jail after a Delhi court remanded him in judicial custody.

Special CBI Judge O P Saini remanded Balwa in judicial custody a day after Raja was sent to Tihar Jail till March 3.

The Dynamix Balwas (DB) group managing director was produced in court following expiry of his four-day CBI custody. The court took into account CBI counsel Akhilesh’s submission that he is no longer required for interrogation but he may be remanded in judicial custody as the probe into the case is not yet complete.

Again, no conviction, just a remand to custody to facilitate the investigation.

Feb 19, 2011

India Today reported that Sadiq Batcha, aide to A. Raja was summoned:

The Central Bureau of Investigation (CBI) has summoned a key aide of former telecom minister A. Raja, Sadiq Batcha, for questioning in connection with the 2G spectrum allocation scam.

Batcha, who is the promoter of Greenhouse, a company considered to be a front company of Raja, will appear before the probe agency on February 23.

Livemint also reported follow up investigations of the relationship between Swan Telecom and Kalaignar TV:

As the Central Bureau of Investigation (CBI) conducted searches at Kalaignar TV Pvt. Ltd in Chennai on Friday as part of investigations into alleged wrongdoing in the allocation of second-generation (2G) telecom spectrum, another phone company’s links to the television house came under scrutiny.

CBI and the Enforcement Directorate (ED) have begun examining the transfer of Rs.100 crore from STel Pvt. Ltd, which got spectrum during former telecom minister A. Raja’s tenure. They allege that the money eventually went to Kalaignar TV, owned by persons close to the leadership of the Dravida Munnetra Kazhagam (DMK), a key ally of the Congress party in the United Progressive Alliance government at the Centre. Raja is a member of the DMK, led by Tamil Nadu chief minister M. Karunanidhi.

The investigative agency is already pursuing links between Kalaignar TV and Swan Telecom, which got spectrum in 2008.

Highly placed CBI and ED officials allege STel’s money was transferred in late 2007 to Sripoorna Holdings Pvt. Ltd, from where it went to Kalaignar TV. The officials spoke on condition of anonymity.

Feb 21, 2011

The CBI does not work on Sundays, it seems. However, on Monday it was hard at work, trying to make an impact on the coming parliamentary session, as TOI reported:

The Dhoots of Videocon were the latest in a line of corporate biggies questioned by CBI over the 2G spectrum scam. Venugopal and his brother Rajkumar Dhoot were posed questions on Monday about the funding and transactions of Datacom Services (now Videocon), a 2G licence winner.

CBI is questioning all private telecom operators on a daily basis. Senior officers in the agency said they would examine all the beneficiaries by March 1 and there could be a few arrests as they have found links of kickbacks paid to former telecom minister A Raja.

CNN-IBN claimed a scoop:

The Central Bureau of Investigation (CBI) is now probing suspected links between Loop Telecom and RCom with 12 Mauritius-based companies.

A copy of the CBI investigation done so far in the 2G scam accessed by CNN-IBN shows that shareholding patterns of Loop Telecom and Reliance Communications are under scanner. The Anil Ambani group on Monday reacted saying, “Neither RCom nor any other ADA company/individual has any interest directly or indirectly with any company in Mauritius.”

CBI has sent Letter Rogatory to Mauritius to get find out who are the real owners of these 12 companies.

Feb 22, 2011

IE reports what was expected for the last couple of weeks, the announcement of a JPC by the prime minister:

Bowing to the tremendous pressure kept up by a united Opposition, Prime Minister Manmohan Singh today announced the government’s decision to set up a joint parliamentary committee (JPC) to probe the 2G spectrum scam, saying the country could “ill afford” the disruption of the crucial Budget session of Parliament.

Making the announcement in Lok Sabha as soon as it met for the first working day of the session, Singh said a formal motion for the constitution of the Joint Parliamentary Committee would be moved soon.

Mar 1, 2011

TOI reported that CBI may want investigate a large number of people:

Sixty-three persons, including promoters and CEOs of 10 telecom firms have come under its scanner in the 2G spectrum case, the CBI on Tuesday told the Supreme Court which expressed satisfaction over the ongoing probe.

The central government, which is also party to the case, informed a bench of justices G S Singhvi and A K Ganguly that it is in favour of setting up a special court to try the accused in the 2G case and the law minister has written a letter to the Delhi high court chief justice asking him to constitute a court and identify a judge for this purpose.

Mar 2, 2011

Even as the image of the Tata group seems set to be dragged through mud, they appealed for in-camera hearings. TOI reported the reasons behind this:

The Tatas have sought in-camera hearings of the 2G scam. The request was made by Tata counsel Harish Salve on Tuesday who asked the Supreme Court for hearings away from the public and media after a petitioner accused the Tata group of wrong-doings.

“The court may consider holding in-camera proceedings as petitioner’s counsel Prashant Bhushan is making allegations based on some source information which gets highlighted in the media,” Salve said while placing his request before a Bench comprising Justices G S Singhvi and A K Ganguly.

Earlier, Prashant Bhushan alleged that Tata Realty had played a key role in financing several players through Unitech to get spectrum. He said, “As per the Justice Shivraj Patil report, Tatas were not entitled to get spectrum as they had applied for it only on October 22, 2007 and stood at the end of the queue under the first come first served principle.”

He added: “However, they were allotted spectrum under the dual technology escape route and there was a quid pro quo when they gave a large chunk of land to A Raja’s party DMK. This has come to light in the Radia tapes.”

Mar 3, 2011

TOI reported:

The Supreme Court on Wednesday called for all correspondence between Department of Telecom (DoT) and mobile phone service provider S-Tel after it was alleged that the company was arm-twisted in 2010 to drop its opposition to alleged arbitrary change in policy.

During the hearing on PILs seeking cancellation of all 122 spectrum licences, a Bench of Justices G S Singhvi and A K Ganguly was told the cancellation order became a tool to arm-twist S-Tel into a compromise.

DoT’s March 5, 2010 order cancelling S-Tel’s licences forced the company to agree to the government’s offer in the Supreme Court that it would wait till additional spectrum was available.

The bench also permitted Swamy to place on record a home ministry report against Etisalat DB Telecom Limited, raising security concerns because of Etisalat’s presence in Pakistan and Afghanistan.

On the basis of this report, the finance ministry too raised an objection with DB Realty Group owner Shahid Balwa, who has challenged the home ministry finding in the Delhi HC. Etisalat’s counsel, senior advocate Harish Salve, said, “The initial investment came through foreign direct investment route. Those facts are on record. I believe further investment required Foreign Investment Promotion Board clearance and there was some objection raised by the government. But that applied to Balwa against which he has filed a petition in HC.”

Elsewhere, TOI reported the two weeks’ extension of Raja’s remand:

A Delhi court today extended the judicial custody of former Telecom Minister A Raja and three others, arrested for their alleged involvement in the 2G spectrum allocation scam, till March 17.

Raja appeared before the court through video conferencing while his former Personal Secretary R K Chandolia, former Telecom Secretary Siddarth Behura and Swan Telecom promoter Shahid Usman Balwa were present in person after the expiry of their judicial custody.

Special CBI Judge O P Saini extended the judicial custody of the trio after hearing their arguments.

Mar 4, 2011

Zee News reports:

Senior Congress member PC Chacko was on Friday made the Chairman of the JPC on the 2G spectrum issue, setting in motion the probe into what the opposition is alleging as the biggest scam in independent India.

65-year old Chacko, who represents Thrissur in Kerala in the Lok Sabha, was appointed the head of the 30-member high level panel by Speaker Meira Kumar, Parliamentary Affairs Minister Pawan Kumar Bansal told reporters.

The JPC, having 20-members from the Lok Sabha and 10 from the Rajya Sabha, came into being a few days back, ending three-months of deadlock in Parliament between the government and the opposition, which latched on to a report of the Comptroller and Auditor General late last year which spoke of a presumed loss of Rs 1.76 lakh crore.

The two Houses of Parliament have passed resolutions approving the setting up of the JPC.

The JPC will examine irregularities and aberrations, if any, in the implementation of government decisions and policy prescriptions on telecom licences and spectrum from 1998 to 2009.

The Parliamentary panel will also make recommendations to ensure appropriate procedures for allocation and pricing of telecom licences.

It will examine policy prescriptions and their interpretation by successive governments, including the decisions of the Union Cabinet and the consequences thereof, in the allocation and pricing of licences and spectrum.

Mar 12, 2011

TOI reported on the CBI questioning of Kanimozhi:

Hot on the 2G spectrum money trail, a CBI team questioned Tamil Nadu chief minister M Karunanidhi’s daughter and Rajya Sabha MP Kanimozhi, his wife Dayalu Ammal and the managing director of the family-owned Kalaignar TV, Sharad Kumar here on Friday. The questioning of Karunanidhi’s clan members by the agency comes in the run-up to assembly elections a month away.

The probe focussed on the Rs 206-crore transaction to Kalaignar TV in 2009, arranged by DB Group, which owns Swan Telecom, one of the biggest beneficiaries of the 2G spectrum allocation by Raja. While Dayalu Ammal, who was accompanied by Karunanidhi’s nephew Amirtham, was questioned for about half-an-hour, Kanimozhi and Sharad Kumar, who arrived together, were quizzed for about two hours, 11.30am onwards.

March 16, 2011
IE gives background information on the late Sadiq Batcha:

The CBI’s raid on the Chennai home of A M Sadhick Batcha on December 8 last year lasted nine-and-a-half hours from 8 am to 5.30 pm — among the longest raids carried out in connection with the 2G scam so far. The raid on the Perambalur home of the arrested former telecom minister A Raja on the same day, by contrast, lasted only for a little over three hours.

Batcha, a close aide of Raja’s, was a key link in the complex web of illegal transactions now under probe, and was thought to have facilitated the investment and transfer of the bribe money. Despite several raids and arrests, the CBI has so far not been able to decisively establish the money trail in the scam, and had been seeking Batcha’s help to understand the operation.

The Hindu reports:

Sadiq Batcha, aide of former Telecom Minister A. Raja, committed suicide by hanging at his residence here on Wednesday, police said. He left behind a suicide note, which said the media’s coverage of the 2G spectrum allocation scam had maligned his image in society, the police claimed.

The death evoked statements expressing suspicion over its probable cause from political parties, and the Tamil Nadu government announced that the case would be transferred to the Central Bureau of Investigation.

Mr. Batcha (38), Managing Director of city-based export firm Green House Promoters, was under the CBI scanner for his suspected links with those involved in the 2G case and was questioned by the agency on February 22 in Delhi. Earlier, his residence here was searched.

At 12.45 p.m., Mr. Batcha was found hanging by a rope normally used for the cradle of his younger child in the bedroom of his residence in Teynampet, police sources said.

His family members rushed him to Apollo Hospital, where doctors pronounced him dead on arrival. The body was taken to the Government Royapettah Hospital for post-mortem, which is scheduled for Thursday morning.

April 15, 2001

Although the full story of the 2G spectrum allocation scam is a complicated fabric of lies, only one thread of which continues to be investigated and brought to court. That is the nexus between Raja, Swan Telecom, which was backed by DB Realty and allegedly owned by Anil Ambani. A terse item in ET tells how spooked the market is by all these accusations:

Shares of Unitech, DB Realty and Reliance Communications, which are in the midst of 2G scam, today closed lower in the range of 1-2 per cent on the Bombay Stock Exchange (BSE). ADAG [Anil Dhirubhai Ambani Group] company Reliance Communications (RCom) is the holding company of Reliance Telecom which has been named in the charge-sheet filed by CBI in the 2G spectrum scam case.

The WSJ noted the consequent slowdown in the realty market:

One of the most affected industries is likely to be India’s real-estate sector, which also has been racked by scandal. A Mumbai housing project that was meant for war widows was, instead, auctioned off, drawing attention to corruption in the industry.

Then Shahid Balwa, founder of a real-estate company DB Realty, was arrested in relation to a wide-ranging investigation into the government’s 2008 sale of mobile-telephone spectrum. Mr. Balwa also is the founder of one of the companies alleged to have received spectrum at unfairly low prices. Mr. Balwa, who has stepped down as managing director of DB Realty, denies the allegation.

Pujit Aggarwal, managing director of real-estate firm Orbit Corp., says banks have withdrawn their support for the industry.

This opportunity is taken by the notorious Niira Radia to sling some mud at Sharad Pawar. That’s a brilliant move, since Sharad Pawar’s image is such that any mud will stick. RTT News reports:

Corporate lobbyist Niira Radia has told the Central Bureau of Investigation (CBI) that India’s agriculture minister Sharad Pawar may be controlling the controversial DB Realty, according to media reports released on Thursday.

She also claimed Pawar may have pursued the issue of 2G spectrum and licence for Swan Telecom as well as to Anil Ambani-controlled Reliance Communications with former telecom minister A Raja. But Radia added that she had no documentary proof or evidence to back up her allegation.

The report above does not mention that Radia’s firm issued a press statement alleging the connection. Predictably, Pawar issued a denial, as ET reports:

Union Agriculture Minister Sharad Pawar has denied allegations that he controlled or held financial interest in DB Realty, whose promoters Shahid Balwa and Vinod Goenka have been chargesheeted by the Central Bureau of Investigation in the 2G-spectrum allocation case.

The CBI has concentrated on one of the 14 companies who are alleged to have used illegal means to gain 2G spectrum. Now the entry of Radia into the public domain on this issue makes it seem as if the public outrage about this scam will be used to settle scores between the various beneficiaries of a Raja’s largesse.

25 April, 2011

ET reports an ongoing development in the scam:

The Central Bureau of Investigation (CBI) on Monday named five more people, including Tamil Nadu Chief Minister M Karunanidhi’s daughter Kanimozhi, co-accused in the case involving the award of second generation (2G) phone spectrum.

The supplementary chargesheet, the second thus far, filed by the premier probe agency in a special court here also names as co-accused Sharad Kumar of Kalaignar TV, Karim Morani of Cineyug Films, Asif Balwa and Rajiv B Agarwal of Kusegaon Realty.

“I don’t want to comment now,” Kanimozhi told IANS in Chennai.

Dayalu Ammal, wife of Karunanidhi and stepmother of Rajya Sabha member Kanimozhi, does not figure in the charges filed Monday as speculated by a section of the media.

Kanimozhi, Dayalu Ammal and Kumar have 20, 60 and 20 per cent shares in the channel respectively.

“Investigations have also revealed that in furtherance of the conspiracy, Dynamix Realty, a partnership firm of DB Realty Ltd and other DB group companies, paid Rs 200 crore to Kalaignar TV Pvt Ltd during December 2008 to August 2009, following a circuitous route through Kusegaon Fruits and Vegetables Pvt Ltd and Cineyug Films Pvt Ltd (DB group holds 49 per cent equity in it),” CBI said in its first charge sheet filed on April 2.

The probe agency had first named as accused former communications minister A. Raja, his personal aide R.K. Chandolia, former telecom secretary Siddhartha Behura and Swan Telecom promoter Shahid Balwa.

Later, five more corporate executives were added to the list as co-accused — Vinod Goenka of Swan Telecom, Sanjay Chandra of Unitech and three officials of Anil Ambani Group: Gautam Doshi, Hari Nair and Surendra Pipara.

Livemint summarizes:

K. Kanimozhi, Rajya Sabha MP and daughter of Tamil Nadu chief minister M. K. Karunanidhi, along with Sharad Kumar, MD of Kaliangar TV, Karim Morani, MD of Cineyug Films Pvt Ltd, Asif Balwa, cousin of Shahid Balwa and Rajeev Agarwal of Kusegaon Realty Pvt Ltd have been named by the Central Bureau of Investigation (CBI) in its first supplementary chargesheet filed on Monday.

Former telecom minister A. Raja has also been named in the chargesheet for receiving bribes.

The CBI’s second chargesheet in the mammoth telecom scandal revolves primarily around the quid pro quo between Balwas, Raja and others closely associated to the Dravida Munnetra Kazagham (DMK) party, according to CBI’s special public prosecutor A. K. Singh.

The CBI has used the Prevention of Corruption Act and the charge of criminal conspiracy under the Indian Penal Code to implicate those it has named.

29 April, 2011

While the money owed to the public has disappeared, all major political groups are trying to pin the blame on each other, not for scamming you and me, but for obstructing proceedings.

IE reported the deadlock in the Public Accounts Committee, where everyone seems to be in the wrong:

A meeting of the Public Accounts Committee (PAC) of Parliament, convened to take a final view on its draft report on the 2G scandal, turned into a battlefield today, forcing panel chairman Murli Manohar Joshi to adjourn proceedings.

The Congress-DMK combine, upset over the indictment of former Telecom Minister A Raja and critical observations about Prime Minister Manmohan Singh in the draft report, held mock proceedings which saw nine UPA members — seven Congress, two DMK — and one each of the SP and BSP opposing adoption of the draft. In effect, 11 from the 21-member committee rejected the report.

Joshi declined to make any comment before April 30 when the present PAC completes its term. But sources close to him said that the entire exercise of voting, after he had adjourned the meeting, amounted to “no proceedings” and there was no question of the report being rejected. As far as Joshi was concerned, the status of the draft report remained intact, sources said.

The voting, conducted with Saifuddin Soz of Congress in the chair, made one thing clear: the ruling party had won over both the SP and BSP members.

In the past the SP and BSP have not become famous for financial impropriety, nor has the Congress been above buying votes. The sheer idiocy of the proceedings is pointed out by TOI:

Split on political lines, the committee meeting on Thursday witnessed noisy interruptions and heated exchanges more befitting of zero hour point-scoring than the bipartisan proceedings of an important parliamentary panel. However, after more than three hours of heated drama and virtually a hand-to-hand combat over rules, the draft’s status remains in limbo, with the Opposition preventing a vote that would have junked the indictments.

The exchanges between the rivals were capped by UPA members “electing” Saifuddin Soz as the chairman in place of Murli Manohar Joshi after the latter did not allow a vote on the controversial report.

The fight will now continue outside the committee with the Opposition looking to ensure that the report is seen as that of the PAC and not as “Joshi’s report” that Congress has rubbished it as. There are indications that PAC chairman Joshi may present the report to Lok Sabha Speaker Meira Kumar after her return from Arunachal Pradesh on Friday.

Joshi, not the most democratic of ministers during his tenure at the head of the Department of Human Resources two governments ago, nor one who paid much heed to the niceties of the law during the Ayodhya years, seems to have turned a new leaf, if HT is right:

A day after a chaotic meeting of the Parliament’s PAC, its chairperson Murli Manohar Joshi along with NDA, AIADMK, BJD and Left members, are exploring the possibility of submitting the draft report on 2G scam to Lok Sabha Speaker Meira Kumar, before its term expires on Saturday. Joshi is understood to have held confabulations with members of like minded parties in the Public Accounts Committee (PAC) on Friday morning and discussed the legal angles relating to his powers as its chairperson.

Sources aware of the developments said that Joshi is busy examining the various rules governing the functioning of the PAC, before he takes a final call on submitting the draft report to the Speaker. A member of the committee pointed out that Joshi was “free” to submit the report to the Speaker’s office even in her absence.

The famously humble Chidambaram also joined the melee, as HT reports:

Home minister P Chidambaram on Friday attacked PAC Chairman Murli Manohar Joshi saying his draft report on his role in 2G spectrum allocation was a “gross distortion” which “deliberately and mischievously” omitted his suggestions on the issue. In a statement, he said that his note to Prime Minister
Manmohan Singh on January 2008 did not deal with the entry fee for 2G spectrum allocation but only usage charges and even a “person with average intelligence would have noticed that”.

Asked at a press conference whether Joshi was a person below average intelligence, he replied with a tinge of sarcasm that he was referring to himself.

“I did not say that. I am talking about persons like me with average intelligence will know. I was referring to myself,” the Minister said.

Asked to respond about BJP leader Yashwant Sinha’s accusation of his “direct complicity” in the 2G controversy, he said “why should I respond.”

Chidambaram was hitting back at Joshi for the critical remarks in the draft report which said that the Committee was shocked and dismayed to note that the Finance Minister in his note had acknowledged that Spectrum is a scarce resource but made a unique and condescending suggestion that the matter be treated [as closed].

The committee viewed it as most unfortunate that the finance minister, the guardian of public exchequer and entrusted with principal task of mobilisation of resources, pleaded for treating the matter as closed instead of initiating stringent and swift actions.

May 8, 2011

Kanimozhi appeared in court on May 6 and 7 and mail a plea for bail. The hearing is set for May 14. A summary of the situation from IE:

Seeking her custodial remand “till the conclusion of trial” in the 2G spectrum scandal, the CBI today opposed the bail plea of DMK MP Kanimozhi and told the court that “she was close to (former Telecom minister) A Raja, active brain behind Kalaignar TV and controlling everything from behind the scene”.

Maintaining that the alleged transfer of Rs 200 crore from Dynamix Realty to DMK-run Kalaignar TV was quid pro quo for grant of licences to Swan Telecom by Raja, CBI special prosecutor U U Lalit said: “This is nothing but the spoils of crime getting transferred to the TV channel.”

Kanimozhi, daughter of DMK chief Karunanidhi, will now have to be present in court daily throughout the next week from 10 am to 5 pm as Special CBI Judge O P Saini reserved the decision on her bail plea and that of Kalaignar TV managing director Sharad Kumar for May 14 — a day after declaration of the Assembly election results in Tamil Nadu.

June 21, 2011

Kanimozhi’s bail blea was turned down by two courts. She then appealed to the Supreme Court. The Hindu reports on the Supreme Court’s rejection of bail for Kanimozhi:

The Supreme Court on Monday dismissed DMK Member of Parliament Kanimozhi’s bail plea in the 2G spectrum allocation case and questioned the Central Bureau of Investigation for its failure to interrogate the accused for recovering certain documents.

However, the court offered her some hope, saying she could approach the trial court for bail once charges are framed. It said she shall be entitled to invoke Section 437 of the Criminal Procedure Code “(when bail may be taken in case of non-bailable offence),” which provides for, among other things, grant of bail if the person is under the age of 16 or is a woman or is sick or infirm.

The CBI is likely to file soon a third charge sheet soon after which the special CBI court is expected to frame charges.

The Bench was not impressed with defence plea that the accused were willing to abide by any condition for bail and even the former International Monetary Fund chief Dominique Strauss-Kahn was granted bail in a sexual molestation case.

“Let us keep the media discussions outside. It tends to blur our thinking,” the Bench said.

It did not agree with the plea of senior counsel Sushil Kumar that Ms. Kanimozhi should be granted bail as she has a 10-year-old child to look after and that she was being denied his company. “That happens to all other women,” it said.

July 7

The dirt in India’s largest scam continues to come to light. NDTV summarizes the CBI’s deposition to the Supreme Court on Juky 6:

Mr Maran’s stature as a political liability was considerably expanded yesterday after the CBI said it had “preliminary evidence” against him in the telecom scam, which also cost the DMK’s A Raja his job as Telecom Minister and landed him in Tihar Jail.

Mr Maran was Telecom Minister from 2004 to 2007. Mr Raja succeeded him. Both their tenures, according to the CBI, were littered with financial malpractices.

The last few weeks have witnessed an accelerated investigation by the CBI on accusations that Mr Maran misused his office as Telecom Minister and followed a Friend and Family plan.

C Sivasankaran, who owned Aircel, testified to the CBI that he was denied critical licenses by Mr Maran till he finally agreed to sell his company to Maxis, an empire headquartered in Malaysia and owned by T Anandakrishnan. The CBI said yesterday that Mr Sivasankaran’s allegations do not appear baseless. And that the minister ignored “unanimous” consent from other telecom officials to deliberately delay the licenses Mr Sivasankaran needed. Once Maxis bought the company, the licenses appeared. And Mr Anandakrishnan pumped close to Rs. 800 crores into Sun TV, owned by Mr Maran’s brother.

Details of the CBI’s deposition were reported by IE:

It was the deposition of former telecom secretary Nripendra Misra before the CBI on the delay in granting new licences to Aircel in 2004-05 that sealed Dayanidhi Maran’s fate. The CBI’s status report on 2G scam filed before the Supreme Court on Wednesday says it was Maran who forced C Sivasankaran to sell his company to Maxis of Malaysia. The CBI report does not address the conflict of interest issue raised by Sivasankaran while pointing out that Maran’s refusal to grant Aircel licences forced him to sell out — Siva pointed out that within a few months of Maxis getting licences from Maran, a group company Astro picked up a stake in his brother’s Sun Network.

Misra, who was telecom secretary from February 1, 2004, to March 30, 2005, told the CBI that he had no role in the matter of the delay of licences and he merely complied with the minister’s orders relating to scrutiny of Aircel applications by sending them to the relevant departmental sections. While leaving office, he directed his officials that as and when the scrutiny sought by the minister is over, the matter be placed before his successor. This was the last note he wrote on March 30, 2005, his last day in office.

The denouement is reported by TOI:

A day after he was nailed by the CBI in the 2G spectrum allocation scam, Union textile minister Dayanidhi Maran on Thursday met Prime Minister Manmohan Singh and handed over his resignation.

Maran’s resignation came minutes after the cabinet meeting ended.

25 July, 2011

IE is one of many papers and channels which cry out today’s biggest political news:

A. Raja

Former Telecom Minister A Raja today sought to rope in Prime Minister Manmohan Singh and then Finance Minister P Chidamabaram in the 2G case, telling a court the issue of sale of equity by spectrum licencees was discussed with them.

Defending himself against corruption charges in the 2G scam, the 47-year-old DMK MP also submitted before Special CBI Judge O P Saini there was nothing wrong in his decision of not auctioning 2G spectrum and that he was merely following the policies pursued by his predecessors and the NDA government.

Senior Advocate Sushil Kumar appearing for Raja, now behind bars, said when Home Minister Chidambaram was the Finance Minister he had told the Prime Minister that dilution of shares by the accused licencees to attract FDI did not amount to sale of licence.

Mr. Raja did not mince his words in court. ET reports that he voiced what has been whispered about the Tatas in the last few months:

P. Chidambaram

A Raja, former Telecom Minister and prime accused in 2G spectrum case, on Monday alleged in a Delhi court that CBI sparedTata Teleservices which made Rs 14,000 crore in the scam and dared the agency to touch the company’s top boss.

“Let the prosecution touch the man who has made Rs 14,000 crore in this. They cannot touch him. This is my challenge (to CBI). Picking and choosing (the accused) is not permissible in law,” Raja’s counsel and senior advocate Sushil Kumar contended before Special CBI Judge O P Saini.

The DMK MP said nine telecom companies were issued 2G licences but CBI alleges that he conspired only with two companies -Swan Telecom andUnitech Wireless of Sanjay Chandra – leaving out Tata Teleservices and others.

Kapil Sibal

Mr. Sibal, in the meanwhile is busy asking for every criminal act to be forgotten and every wrongdoer to be forgiven. Here is a quote from and interview he gave to the TOI:

Everybody is fearful. Nobody wants to get involved with the CBI. You cannot run an industry under threat of Tihar jail. No economy can flourish.

September 21, 2011

The newspapers have been full of headlines with question marks: is P. Chidambaram, the ex-finance minister involved in India’s biggest scam? The Kolkata Telegraph puts the rumours and headlines into perspective:

Janata Party president Subramanian Swamy today produced a purported note from the finance ministry to suggest that fingers were being pointed at P. Chidambaram from within the government itself as recently as this March in the telecom scandal.

The contents of the note largely fall into the category of “hindsight wisdom”, claiming spectrum could have been allotted through auction — instead of the first-come-first-served policy that was followed in 2008 — had Chidambaram, the then finance minister, insisted so.

The note suggests that Chidambaram’s ministry “implicitly agreed” to retain the fee in 2008 at the 2001 level — something the government has sought to justify by underscoring the need to remove entry barriers and break monopolies.

But the time of the note’s despatch to the PMO — March this year when the UPA was battling charges of scam after scam — has swivelled the spotlight back to what is being viewed as a tug of war between Pranab Mukherjee, who runs finance now, and Chidambaram, who helmed the ministry when 2G licences were given out in 2008 and now heads the home ministry.

The revelation of the latest salvo comes against the backdrop of a whisper campaign and counter-thrust that appeared to lock the finance ministry and the home ministry in an undeclared tussle aimed at undermining each other. The charges — some of them were probed and officially dismissed as unsubstantiated — ranged from attempts to bug the finance minister’s office to alleged favouritism linked to a particular officer in the ministry.

This is back-room politics at its most visible. But the note is pretty detailed, as the rest of the above report goes on to reveal. Is there substance behind it? We will have to wait to find out, if this report in ET can be taken at face value:

CBI has told the Supreme Court that its autonomy will be adversely affected if the apex court entertains the plea of Janata Party President Subramanian Swamy, seeking direction to the agency to investigate the alleged role of then Finance Minister P Chidambaram in the 2G spectrum allocation scam.

“Even the CVC is barred from directing CBI the manner in which investigations were to be carried out. The Supreme Court will help CBI keep its autonomy by not directing the agency to investigate a particular person,” CBI counsel KK Venugopal argued before a bench comprising Justice GS Singhvi and Justice AK Ganguly on Wednesday.

The CBI functioned autonomously under the supervision of Central Vigilance Commission which is precluded from interfering in the agency’s course of investigations. The entire investigations into 2G spectrum scam is being monitored by the apex court to keep CBI on the right track. At one point of time, the court itself had appreciated the investigations being carried on by the agency, said Venugopal.

September 22, 2011

The CBI has long held that the quantity of public loss was Rs. 30,000 crores, and not the larger figure that the auditor general estimated. Now the Telecom regulatory body, TRAI, seems to have written a controversial note in which it claims that there was no loss. ET reports that the supreme court takes a dim view of this:

The Supreme Court has criticised telecom regulator TRAI’s report, assessing zero loss in 2G spectrum allocation.

“We are really surprised over the communication. It was created as an autonomous regulator. It is a serious debatable issue what they have done and stated in recent days,” a bench of Justices G S Singhvi and A K Ganguly said while indirectly referring to the Telecom Regulatory Authority of India report.

“We were not deliberately commenting on the issue as we did not want to prejudice any one. But, the reluctance of the court to comment on it should not be taken lightly,” the bench said.

The court termed the contents of the letter from Telecom Regulatory Authority to CBI as “seriously debatable” adding, because of this, “some people are now terming it as an alleged loss from 2G spectrum allocations.”

“We reserve our final decision but we are surprised by that communication. It (Trai) is treated as an independent body. What they have done recently is a seriously debatable issue,” remarked Justice Singhvi.

The bench said, “everything should have been left to the courts to decide.” Senior advocate KK Venugopal, who appeared for CBI, said the agency has rejected TRAI’s findings.

The bench was constrained to make such passing observation when the issue of amount of loss caused to the public exchequer in 2G scam came up before it.

September 27, 2011

This report in IE can leave you speechless:

The CBI is all set to register a Preliminary Enquiry into allegations that as Telecom Minister between 2004 and 2007, Dayanidhi Maran had instructed BSNL to install over 300 high-speed telephone lines at his Chennai residence.

The telephones were allegedly used by a television channel owned by Maran’s brother through underground cables laid from the minister’s residence to the Sun TV office. These were ISDN lines capable of carrying television programming.

“Our investigations have reached a stage where we are ready to register a preliminary enquiry. It can be registered any time now,” a CBI source said.

September 29, 2011

News like that is usually just the leader for more substantial stuff, like this report from DNA:

The CBI on Wednesday told the Supreme Court that it had completed the preliminary inquiry into Dayanidhi Maran’s, former telecom minister, role in the 2G spectrum allocation scam and an FIR would be filed within a few days.

KK Venugopal, the agency’s counsel, submitted a status report in a sealed envelope without making any reference to P Chidambaram, who was the finance minister in 2008.

Maran has been accused of creating a situation where C Sivasankaran, the original owner of telecom company Aircel, was forced to sell off his stake in the company to T Ananda Krishnan’s Maxis group based in Malaysia in 2006. Within months of Krishnan buying Sivasankaran’s stakes in Aircel, Sun Direct TV — owned by Maran’s brother Kalanidhi — received substantial investment from Maxis group (Aircel). Krishnan is believed to be close to the Maran brothers.

Maran was the telecom minister from May 23, 2004 to May 15, 2007, and Raja had replaced him. Apart from Maran, the CBI will file FIRs against Essar officials as well. Venugopal informed the court that it had completed its investigations against telecom companies Essar and Loop in the 2G scam and a decision on the future course of action would be taken within two to three weeks.

Essar, it has been alleged, was not entitled to get 2G licence. But it floated a front company, Loop, by disguising its ownership to get the licence.

Also worth remembering is that according to the now-public tapes of conversations between Nira Radia and Barkha Dutt, the latter played a role in Raja getting into the ministry.

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Written by Arhopala Bazaloides

December 27, 2010 at 4:17 am

Posted in bureaucracy, business, corruption, government, India, politicians, telecom

Tagged with , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

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  1. […] crore (2.6 milli-Rajas, on a scale of corruption where the Rs. 176,000 crores of losses due to the 2G spectrum scam is […]

  2. […] Back story here. […]

    Once A Raja « Karela Fry

    February 2, 2011 at 7:35 pm

  3. […] Keep in mind that the scandal is supposed to have cost INR 1.76 lakh crores, ie, INR 1.76 trillion. The complete backstory is here. […]

  4. […] For the story till now, see this […]

  5. […] The full story is being documented here. […]

  6. […] INR 107 crores is 0.6 milli-Raja (where a Raja is the unit of scam equal to the INR 176,000 crores lost in the 2G deal). […]

  7. […] The last week saw rapid developments in the investigations into India’s largest scam to date. […]

  8. […] The full story of the 2G spectrum allocation scam is a complicated fabric of lies, only one thread of which continues to be investigated and brought to court. That is the nexus between Raja, Swan Telecom, which was backed by DB Realty and allegedly owned by Anil Ambani. A terse item in ET tells how spooked the market is by all these accusations: Shares of Unitech, DB Realty and Reliance Communications, which are in the midst of 2G scam, today closed lower in the range of 1-2 per cent on the Bombay Stock Exchange (BSE). ADAG [Anil Dhirubhai Ambani Group] company Reliance Communications (RCom) is the holding company of Reliance Telecom which has been named in the charge-sheet filed by CBI in the 2G spectrum scam case. […]

  9. […] a comment » ET reports an ongoing development in the INR 1,760,000,000,000 2G spectrum allocation scam: The Central Bureau of Investigation (CBI) on Monday named five more people, including Tamil Nadu […]

  10. […] Rs. 1,760,000,000,000 in money owed to the public has disappeared, the major political groups are trying to pin the blame on each other, not for scamming you and me, […]

    Charades « Karela Fry

    April 29, 2011 at 4:37 pm

  11. […] dirt in India’s largest scam continues to come to light. NDTV summarizes the CBI’s deposition to the Supreme Court on Juky […]

  12. […] INR 1,76,000 crore telecom scam continues to sizzle. IE is one of many papers and channels which cry out today’s biggest […]

  13. […] report became a damning document, with the claim that Rs. 16,085 lakhs (that’s as large as a tenth of Raja’s 2G spectrum scam) was lost to the public exchequer due to personal corruption of the chief minister Yedyurappa. The […]

  14. […] been full of headlines with question marks: is P. Chidambaram, the ex-finance minister involved in India’s biggest scam? The Kolkata Telegraph puts the rumours and headlines into perspective: Janata Party president […]

  15. […] India’s biggest scam continues to throw up new stories. This report in IE can leave you speechless: The CBI is all set to register a Preliminary Enquiry into allegations that as Telecom Minister between 2004 and 2007, Dayanidhi Maran had instructed BSNL to install over 300 high-speed telephone lines at his Chennai residence. […]

  16. […] Corruption forum also have similar problems. Although these are insignificant when set against the 2G telecom scam or the Commonwealth Games scam, but they do reveal a similar disdain about the law. Share […]

  17. […] well they should. A question which has not been asked often enough is the following: if the 2G spectrum scam is worth Rs. 1,760,000,000,000, then what about getting it back from the scamsters? Share this:TwitterLike this:LikeBe the first […]

  18. […] Hindu reported the first judgment for exoneration of any one accused in India’s biggest scandal: A special court here on Saturday dismissed the prayer of Janata Party president Subramanian Swamy […]

  19. […] Hindu reported the first judgment for exoneration of any one accused in India’s biggest scandal: A special court here on Saturday dismissed the prayer of Janata Party president Subramanian Swamy […]

  20. […] even though the returns per customer was lower than anywhere else in the world. When news of the 2G telecom scam broke it was clear that things were going to change. One of the changes was the cancellation of 122 […]

    Deeper waters « Karela Fry

    February 24, 2012 at 4:04 am

  21. […] years ago statutory government bodies like the CAG had uncovered huge corruption in the government. The press was tracking this story and others. The Indian polity was up in arms. Then the movement […]

  22. […] company to know this. If business was really their mantra then they would not have tried to sweep India’s biggest scam under the carpet of coalition dharma. Trying to right that wrong led the supreme court to cancel a […]

  23. […] The Hindu Business Line reminds us of the background to the still simmering 2G spectrum scandal: […]


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