Raja Ministry in fresh scam
                 J Gopikrishnan | New Delhi- Wednesday, January 27, 2010

             Non-existent firm set to be BSNL’s WiMax franchisee

Yet another mega scam has been added to the continuing saga of fraud and
corruption in the functioning of the Telecom Ministry under A Raja. One of the
companies, shortlisted for BSNL WiMax franchisee across India, does not exist.

Of the four shortlisted companies, a firm called Ampules, designated to operate
in Chennai, Haryana, West Bengal and Himachal Pradesh, is not at all registered
in India. The Ministry of Corporate Affairs online registry shows that no such
company is registered in the country till this date.

This gross irregularity has happened despite specific BSNL guidelines which make
it mandatory that a WiMax franchisee company should be registered in India and
must have Rs 100 crore turnover per year in the last two years.

Only one company having a similar name — Ampoules — is registered in India, but
it has nothing to do with telecom as it is a pharmaceutical company. The full
name of this company is Ampoules and Vials Manufacturing Company Limited and it
was established in Mumbai in 1972.

“If any discrepancy found, we would take action. These companies have only been
shortlisted. Actually, all these procedures were initiated by Chennai unit of the
BSNL. Let me verify the documents of Ampules. I am not sure about their
details. If any violation is found, we would take strong action,” BSNL Chairman
and Managing Director Kuldeep Goyal told The Pioneer on Tuesday.

The Pioneer has learnt from reliable sources that the so-called Ampules (or
Ampoules) is in the process of being floated by some Tamil-origin Malaysian
citizens, believed to be connected with the Wellcom Communications, promoted by
friends of A Raja. Their application is pending before the Chennai RoC.

Sources said the Telecom Ministry exerted pressure on BSNL officials to include
this firm, but the question remains how this unborn firm will pass the BSNL’s
criteria of Rs 100-crore turnover per year for last two years.
After the controversial allocation of 2G spectrum, Raja was trying to involve his
friendly companies in the lucrative WiMax franchisee allotment. First, he tried to
allot the franchise to Wellcom Communications, the company floated by his
Malaysian friends and one T Silvarajoo, a frequenter in his office and hailing
from his home town Peramballur.

When this move was reported by The Pioneer, Raja took a different route last
year by engaging one of his close aides Sanjay Kapoor to float five shell
companies, registered on a single date, same notary, auditor and witness. The
posts of directors of all these five companies were filled by Sanjay Kapoor’s
family members, including his driver. After The Pioneer expose, the PMO asked
the BSNL to cancel the process. Then, the BSNL floated new Expression of
Interest (EoI) with specific conditions in June 2009.

Last week, the BSNL finalised four firms, including the non-existent Ampules (or
Ampoules) for allotment of WiMax franchisee. The other three firms are
Teracom Limited, Adhishwar India Ltd and Chennai-based Take Solutions Ltd.

Teracom, already in the telecom sector, and supported by the multinational Cisco
bagged the maximum number of circles. Adhishwar and Take Solutions are
considered as new entrants in telecom sector and are supported by Israel-based
Alvarion and Chinese ZTE respectively. The non-registered firm Ampules (or
Ampoules) is also supported by Israeli Alvarion. The application of E-mall
Infotech was rejected.

WiMax (Worldwide Interoperability for Microwave Access) is faster than 3G and
4G in providing internet connection to mobiles and laptops. The BSNL’s WiMax
franchisee is considered as a lucrative business, as the private players get 70-80
per cent share of the revenue, out of the expense of the public sector
undertakings’ huge infrastructure. The franchisee also enjoys the advantage of
holding of 20 Mega Hertz of Spectrum, which they could off load stakes at an
exorbitant price to another company. In case of 2G spectrum allotment, real
estate companies Swan and Unitech sold their stakes to multinationals at huge

The BSNL’s Rs 1,000 crore plan to roll out WiMax in rural areas is also dogged
in controversy. The Hyderabad-based Vippalamritha Magnetic Components Ltd
(VMC), which had emerged the fourth lowest bidder for the project, has been
put under scanner for alleged evasion of duties by its parent company while
importing equipment for an earlier BSNL contract.

The Directorate of Revenue Intelligence has also issued a show-cause notice to
Prithvi Information Solution, the parent company of VMC, for the alleged non-
payment of Rs 55 crore as duties. The other selected vendors of BSNL are
Chennai-based Gemini Communications — a new entrant, Chinese ZTE and US-
based Harris Stratex.

The BSNL allotted the most revenue earning circles — Maharashtra, Gujarat and
Andhra Pradesh — one year ago without any tender to US-based Soma Networks.
Former Planning Commission member MS Pathak, son of former Vice-President of
India GS Pathak, is the chairman of Soma Networks. Yatish Pathak, MS Pathak’s
son, is the Chief Executive Officer of the firm.

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