2G spectrum was allocated beyond contracted quantity to 9 firms including Bharti, Vodafone, Idea, BSNL, Reliance, Aircel,” the report said.Niira Radia is said to be involved.Read her details.
Department of Telecommunications (DoT) circumvented the rules to help Swan Telecom, which effectively acted as a front for Reliance Telecommunications. The charges in the CAG report are that Swan should not have been considered for a license because Reliance Communications held 10.7% stake in Swan – and according to the rules, a telecom operator cannot own more than 10% stake in another telecom company operating in the same service area. “Email ID of Swan Telecom was shown as that of a Reliance ADA group official
Another big beneficiary of the 2G spectrum allocation was Unitech Wireless, which had no experience in the telecommunication sector.
After Unitech got the license for a throwaway price of Rs. 1,661 crore, it sold 60 per cent stake to Telenor Asia for a whopping Rs. 6,200 crore.
Mahajan ‘assisted’ Reliance Infocomm to become a nationwide operator without paying full licence fee
Telecom scams are not new. In August 1996, the CBI registered an FIR against former telecom minister Sukh Ram after recovering 3.62 crore from his residences in Delhi and Himachal Pradesh — he made it to the Guinness Book of World Records for the wrong reasons! Thirteen years later, in 2009, he was sentenced to three years of rigorous imprisonment for “criminal conspiracy” and spent time behind bars for a month before being released on bail.
Raja claimed 2G and 3G spectrums were not comparable, just as basmati rice was not the same as PDS rice
During the NDA government, there was a major controversy when telecom companies were allowed to move from a licensing regime to a revenue-sharing one. The sudden removal of Jagmohan from the post of communications minister in 1998 was reportedly a consequence of his refusal to toe the line of a section within his government. In July 1999, following the recommendation of a Group of Ministers headed by Jaswant Singh, the fixed licence fee regime was changed to a revenue share one. This was adversely commented on by the CAG. According to Ratan Tata, if a hypothetical amount was to be calculated at that point of time, the loss to the exchequer would be about Rs. 50,000 crore.
Other ministers for communications during the NDA regime, including the late Pramod Mahajan, were accused of assisting Reliance Infocomm to become a nationwide operator offering “full mobility” in its cellular phone operations without paying the full licence fee. This decision of the DoTwas against TRAI recommendations and the resultant loss to the exchequer was said to be in the region of 1,100 crore. However, the sheer size of the subsequent undervaluation and misallocation of spectrum makes the earlier scandals pale into relative insignificance.
ON 10 JANUARY 2008, at 2.45 pm, an announcement was posted on the DoT website stating that letters of intent (LOIS) for issuance of licences bundled with spectrum would be given to applicants between 3.30 pm and 4.30 pm. The announcement added that application fees running into thousands of crores of rupees would have to be paid immediately by demand draft, along with supporting documentation.
It was made clear that LOIS would be issued to those who deposit their fees first, beating others by even a fraction of a second — this was the infamous first come first served (FCFS) system (or the way movie tickets are sold) that privileged not financial wherewithal, technical competence or experience but speed, clout and foreknowledge. Even the FCFS system was not properly adhered to and the CAG categorically stated that those who obtained licences had prior information about how to apply for these LOIS.
The CAG found that 13 firms that got 85 out of the 122 new licences in 2008 did not satisfy DoT eligibility criteria
A few months earlier, the cut-off date for receipt of applications for licences was suddenly brought forward to enable particular companies to jump the queue. Here are a few examples: Swan Telecom, which had submitted its application on 2 March 2007, was given a licence with spectrum for Delhi on 28 August 2008, while Spice Communications, which had submitted its application in August 2006, was not given spectrum for the same service area.
For Maharashtra, Spice, which submitted its application on 31 August 2006, got a licence in May 2009, whereas Unitech and Videocon got their licences with spectrum much earlier in September 2008 though the two companies had submitted their applications for licences more than a year later in September 2007. Idea Cellular (date of application: 26 June 2006) also got a licence in May 2009 while Unitech (date of application: 24 September 2007) got its licence in September 2008.
THE STORY did not end here. Some of these companies expanded their equity bases by inducting foreign partners who paid large sums of money for the shares. Three examples: in September 2008, Swan Telecom sold 45 percent of its shares to Etisalat (of the United Arab Emirates) for $900 million or around Rs. 4,200 crore — the company had obtained its licence for only Rs. 1,537 crore and did not possess major assets other than a piece of paper, the licence. A month later, Unitech Wireless offloaded 60 percent of its stake to Telenor (of Norway) for Rs. 6,200 crore — this company too counted among its assets only a licence for which it paid Rs. 1,651 crore in January 2008. Thereafter, Tata Teleservices sold 26 percent of its shares to NTT DOCOMO of Japan for Rs. 13,230 crore. Thus, the DoT had undervalued spectrum by between seven and 10 times its true market worth.
This became even more evident in 2010 when the government was able to raise more than Rs. 1,11,500 crore through public auction of third generation (3G) spectrum. Raja claimed 2G spectrum and 3G spectrum were not comparable just as basmati rice was not comparable to rice from the PDS (public distribution system). This argument is fallacious in the context of valuation of spectrum for a simple reason: the spectrum used is the same; only the nature of services provided is different by deploying superior technology — in other words, the same spectrum can be, and is, used to provide faster data transfer and other mobile telecom services.
The CAG found that 13 companies that had received 85 out of the 122 new licences issued in 2008 did not satisfy the DoT eligibility conditions. The companies did not have the stipulated paid-up capital at the time of application and 45 out of these 85 licences were issued to companies which failed to satisfy the condition that providing telecom services should be the main object clause in their memoranda and articles of association.
Crossed lines (from left): Since 1999, Ram Vilas Paswan, Pramod Mahajan, Arun Shourie, Dayanidhi Maran, A Raja and Kapil Sibal have helmed the telecom ministry
The CAG also pointed out that spectrum was provided beyond the contracted 6.2 megahertz (MHZ) to nine existing operators in 2007 despite a number of applications pending for new licences. These were Aircel, Bharti, BPL (Mumbai), the public sector undertakings Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL), Idea, Reliance, Spice (Punjab) and Vodafone.
The biggest beneficiary of additional spectrum was BSNL (61.6 MHZ in 19 telecom circles) followed by Bharti (32.4 MHZ in 13 circles), Vodafone (19.6 MHZ in seven circles), Idea (12.6 MHZ in six circles), MTNL (124 MHZ in Delhi and Mumbai circles) and others. The total loss to the exchequer on account of allocation of additional spectrum at low prices: Rs. 36,993 crore.
In January 2008, when the DoT issued all-India licences at Rs. 1,658 crore, the price was the same as that which had existed in 2001. The CAG used two parameters for assessing the possible “presumptive” or “notional” loss which the exchequer has suffered. In November 2007, S Tel had written first to the PM and later to Raja offering to pay Rs. 13,752 crore over 10 years for allotment of 6.2 MHZ of GSM spectrum.
The CAG took this figure as a benchmark and calculated that the government would have generated revenue of 67,364 crore by selling 122 licences, 35 licences under the dual-technology regime and excess spectrum beyond the contracted amount of 6.2 MHZ.
Further, after taking into account the revenue that was generated after the 3G auction, the price of spectrum for the 122 licences issued can be established at Rs. 1,11,512 crore against the Rs. 9,014 crore that the government actually earned. In addition, Rs. 40,526 crore would have been generated by selling 35 licences under the dual-use category and Rs. 13,841 crore for excess spectrum. Hence, the CAG report estimated the total loss to the exchequer, based on the 3G auctions, at Rs. 1,76,645 crore.
Rao Dheeraj Singh knows a lot about Niira Radia. He was her business partner. He later spent almost two years in prison, accused by Radia of kidnapping her son Karan. Speaking exclusively to INDIA TODAY in his first media interaction after the leaking of the Niira Radia tapes, he makes revelations about her business dealings between 1995 and 2002, a period in which Singh was closely associated with Radia’s Crown Mart International (India) Pvt Ltd.
Singh first met Radia in 1994 when he was working as a traffic supervisor with Sahara Airlines. She was a consultant with Sahara. She hired him for her own company, Crown Mart. They moved to Bombay in 1995, where Radia briefly dabbled in films and a hotel business.
Singh recounts his version of what he believes was her first major deal after moving back to Delhi, “In 1997-98 when we moved back to Delhi, Modiluft had gone bust. We were approached by KLM UK who had leased out two aircrafts to Modiluft but they had been impounded because of pending dues to oil companies. KLMUK mandated Crown Mart to handle the court case for them. You know how things work in India. We worked through lawyers. A Delhi court passed the order to release the aircraft. I clearly remember that she received a call that by the next morning, there would be a stay on the order. At that time the UK pilots were all ready and she ensured that the aircraft took off the very same evening. The case carried on but nobody bothered. Our company was paid Rs 2.5 crore to get the aircraft released.”
In what is public knowledge, Radia’s influence began to grow when the BJP-led NDA came to power in 1998 and Ananth Kumar was appointed Union civil aviation minister. Claims Singh, “It was actually in the BJP regime that everything started going right for us. After the KLM UK deal, a lot of companies started approaching her. We sold some helicopters to Sahara. The Airbus Consortium started supporting her. Karnataka and Maharashtra governments were sold Eurocopters. There was a BJP Government in Maharashtra. Radia had a good relationship with Ananth Kumar. He managed the whole thing for us.” Singh claims to recall meeting a senior leader (name withheld) during the Eurocopter deal. “I remember when this Eurocopter deal with the Maharashtra Government was being negotiated, Niira and I went to Nagpur together to meet the leader, who facilitated it,” alleges Singh.
Singh makes damaging allegations about Radia even going to the extent of saying, “Niira used to get a lot of information and then send it to her clients in France and all over the place. At one point, she wanted to get into defence deals as well.”
More deals meant more commissions. “Niira, Karuna (her sister) and I travelled to Zurich to open bank accounts. I can give you my passport as evidence. I can come to Delhi and give you the name of the Zurich bank where the accounts were opened,” claims Singh (Radia is a PIO). He adds, “The money earned from the deals struck between 1998 and 2001 was getting accrued in Zurich and Channel islands. I don’t know the amount but it was substantial.”
We contacted Radia several times to answer these allegations. Instead, she questioned our ‘better judgement’ on carrying statements made by someone she called a ‘convict’. Later, a communication was sent on her behalf denying Singh’s specific allegation on her Swiss Bank accounts.
Singh talks about the one occasion he believes Radia went one-up on Jet Airways promoter Naresh Goyal by allegedly blocking an aircraft deal for Jet. Alleges Singh, “Jet wanted to buy the aircraft. And she managed to get their permission blocked in the civil aviation ministry. Naresh Goyal was never happy with her. So she approached the French aircraft manufacturer ATR and told them that your aircraft will not be given permission because the aviation ministry has blocked it. The French company told us that okay, we will give you money. Naresh Goyal will not talk to you and he will not give you any money. But we will give you the money and you get the aircraft cleared. Rs 1.85 crore was given to us.”
Singh alleges that Radia’s close ties with the BJP Government extended beyond Kumar. “The BJP Government allotted a huge piece of land to Niira’s trust in Vasant Kunj in 2002. L.K. Advani came to lay the foundation stone of the trust.”
On how Radia met Ratan Tata, Singh’s version of events is as follows, “Singapore Airlines wanted to increase their flights to Delhi and Bombay. Niira got the bilateral agreements done for Singapore Airlines. It was around this time that the company put in a word for Niira to Mr Tata.”
Dheeraj says that he began to drift away from Radia at about the time she landed the Tata Group’s PR accounts. It wasn’t smooth. Claims Singh, “There was a sizeable amount of money stuck in Zurich. And a portion of that was to come to me. She owed me Rs 1.2 crore and there was a big argument. She told me there were a lot of problems and she couldn’t get the money back into the country. And a portion of it had to go to a BJP politician as well. Hawala and money laundering were her domain.” These are allegations which need further investigation.
We also noted an instance, highlighted in the transcript below, where the transcript provided by Mr. Chawla differed from what some news outlets had carried. That occurs shortly after where Mr. Chawla’s transcript has him saying he sent Reliance Industries’ Chairman Mukesh Ambani a message 15 to 20 days earlier.
In a sentence that follows soon after, Outlook and Tehelkahave both interpreted the sentence that begins “Before the judgment was coming…” as ending with the words “I wanted to forewarn him.”
Mr. Chawla’s transcript instead has the sentence ending: “I wanted to probe on him.”
We went back to Mr. Chawla on this point, and he said there was no question about him trying to forewarn Mr. Ambani about anything. He also said he was trying to reach Mr. Ambani to seek his participation in an India Today conclave.
“I’m the only journalist who has put the audio on his own blog and has not disabled the comments,” he added.
He also said, referring to both Ambani brothers: “There’s nothing which I’m promising them, there’s nothing I’m trying to advise them.”
Editors at the two magazines could not be reached immediately for comment.
In response to a query about this conversation, a spokesman for Ms. Radia referred us to a previous statement from the Vaishnavi Group, in which the firm said it was “fully transparent” and the media was spreading misinformation about the firm and Ms. Radia.
Spokesmen for Mukesh Ambani and Anil Ambani did not respond to email requests for comment on Monday.
Now judge for yourself.
Here is the statement Mr. Chawla sent out with the transcript:
“Much has been made about a conversation that Nira Radia had with me. This is just to put the record straight. The 13 minute conversation had nothing to do with the controversial 2G of A Raja. Nira called me as she said ‘to seek my expertise’ on the Battle for Gas’ between the two Ambani brothers. I merely told her that the earlier the brothers put an end to their private battle, the better it will be for the public good. I did not take sides. I did say that I knew both brothers but was equally critical of the tactics being adopted by each to run down the other. Nira also asked me about my son, who is a lawyer and is retained by the Anil Ambani group as their counsel. I however made it clear that my son Ankur was not appearing in the particular Gas case. Following is the transcript of the 13 minute conversation. It is proof, if indeed proof were needed, that I have nothing to hide or be ashamed of.”
And here is the transcript provided by Mr. Chawla (the only alterations India Real Time has made to the transcript as it was e-mailed to us are adding italicized clarifications and translations for Hindi phrases in parentheses, and bold-facing the disputed sentence):
NR Hi Prabhu
PC Ya tell me now
NR Nai nothing, I was just wanting to understand things from you. You always have a very good perspective.
PC On What?
NR On everything Bhai he he he he. Generally you have a good perspective of everything. I just wanted to know what is yr view on this great historic judgment.
PC. Which one, the Bombay one?
NR The Bombay one which takes the family pecked (pact) above the national interest.
PC You see when the brothers are involved, the nation also gets involved na?
NR Ya, probably not a good thing na. not good for the nation.
PC Not good for the nation, but the brothers don’t talk to each other. There is nobody who can force them to talk also
NR Who tho ho gayi na Prabhu tum bhi janthe ho (That’s happened no, Prabhu, you also know.)
PC Maine koshiosh kiyi thi., Nahi hua. Maine kaha ho jayega. (I had tried. It didn’t happen. I said it will happen.)
NR Nahi. I was speaking to him recently, in fact this morning
PC (interrupts) is he back from wherever he had gone, Mukesh?
Major chunk of the 2G spectrum scam money has been moved by former telecom minister A. Raja‘s associates to Malaysia through hawala channels, the CBI has learnt.
The agency is now preparing to widen the ambit of the 2G scam probe and question Raja’s Kuala Lumpur-based associate Vijay Kumar Ratnavelu.
Ratnavelu is the managing director of Wellcom Communication Private Limited – a company raided by the CBI – and lives at 118, Happy Garden, Jalan Kalang Lama, Kuala Lumpur.
Documents accessed by Headlines Today indicate that Raja improved ties with Ratnavelu at the time of allotting the 2G licences.
Sources said that it was at the behest of Raja that Wellcom Communication was registered in Chennai on July 3, 2009.
CBI sources said that Wellcom Communication isn’t the only company under probe. The needle of suspicion also points towards AGM Investment and Finance Private Limited.
CBI sources said that within months of becoming minister, Raja’s kin and associates began putting in place a complex web of companies. Green House promoters, a Chennai-based real estate company, is one of the 14 firms where thousands of crores were illegally parked and black money converted into white.
ake a look at the sequence of events:
In May 2004, Raja took over as minister. On August 23, Green House Promoters was created. On September 3, Raja’s associates opened another company called Equaas Estate. Raja’s brothers too floated several private limited companies in Chennai.
CBI sources said that within four years of Raja becoming minister, his associate Sadiq Batcha – a saree trader – became a billionaire. Batcha is now the focus of the CBI’s investigations.
According to the CBI, Batcha was involved in multi-crore hawala transfers through these companies. He and Raja’s brother are associates in most of these companies. Several relatives of Raja are top officials in the companies.
“Searches conducted so far at around 34 places in Tamil Nadu, Delhi and Noida have led to the recovery of incriminating documents. Searches are still going on,” CBI spokesperson Vinita Thakur said in a brief statement
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