Eternal India article on 2G Spectrum Scandal by kalyan97

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              The Indian Spectrum – Mother
              of All Scams
              J Gopikrishnan*                              judiciary and media.
                                                             The tainted Telecom Minister A Raja
              Some of the rich and the pow-                had three major plans in making money
              erful in the country looted our              as and when he landed from his earlier
              exchequer of over Rs 1 lakh crore            portfolio of Environment and Forests to
              in one of the biggest such deals,            Telecom in May 2007. The first was
              in a style that the court itself             awarding cross technology or dual tech-
              elsewhere described as bar-                  nology which allows the CDMA (Code
              barian. What is more alarming is             Division Multiple Access) mobile oper-
              not the figure as such but that so           ators to operate in GSM (Global System
              much was scooped in one go.                  for Mobile communications) tech-
              The name of that mother scam is              nology. The second was the biggest loot
              2G Spectrum. The following is a              from 2G (Second Generation) Spectrum
              lively, step by step unwinding of            allocation to new-born telecom compa-
              a diary of events providing the              nies and the third was the allotment of
              minute details building up that              BSNL’s WiMax franchise to friendly
              scaring story.                               companies, which is still on the way.
                                                             Who benefited from the dual tech-

                      he 2G Spectrum scam is the           nology and where is the corruption
                      mother of all scandals in India,     angle? The CDMA operators Reliance
                      which resulted in the loss of        Communications and Tata were incur-
              more than Rs 1 lakh crore to the public      ring losses those days due to the low
              exchequer. The perpetrators and benefi-      subscription and envying on the huge
              ciaries of this daylight robbery is still    subscriber base of good mobile tech-
              untouched simply because they had            nology GSM and wanted to switch over
              connections in the echelons of power         to it at any cost. But those days they
              and the support of influential elements      were debarred due to the telecom policy.
              in the ruling and Opposition parties, and      The existing GSM operators Airtel,

              *J Gopikrishnan is a Special Correspondent of The Pioneer, New Delhi.

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           Eternal India, October 2010

           Vodafone, Idea were scuttling the posed to expose this scam, preferred to
           attempts of Reliance and Tata to enter keep quiet, as the beneficiaries were
           their terrain. Though CDMA is good for Reliance Communications and Tata, the
           data transfer, it was very bad in voice mighty people whose tentacles spread
           transfer, where GSM technology excels. across everywhere.
           As a policy decision, allowing dual            Raja tasted the plush money by this
           technology can be regarded as a prac- deal, the like of which he never experi-
           tical one. But the corruption part is enced earlier. And the lure of the 3Ws
           where       Raja     allowed      Reliance (Women, Wealth and Wine) silenced the
           Communications, Tata and a small oper- political-bureaucratic-judicial-media
           ator, but having good rapport in the bigwigs. Except for the litigation filed
           power corridors, Shyam Telelink, now by the GSM operators’ body, the COAI
           known as Systema Shyam, to operate in (Cellular Operators Association of
           GSM sector at a meager licence value of India), and others, nothing much hap-
           Rs 1651 crore,                                                    pened. All litiga-
           which was fixed in       Raja tasted the plush money by this      tions         were
           2001.                   deal, the like of which he never expe- silenced later due
             It    must      be     rienced earlier. And the lure of the     to the coveted role
           remembered that           3Ws (Women, Wealth and Wine)            Raja’s party DMK
                                    silenced the political-bureaucratic-
           in 2001 the mobile                                                enjoyed in the
                                           judicial-media bigwigs.
           subscribers were                                                  UPA-1 Govern-
           around four million. The value of Rs. ment. Knowing all, Prime Minister
           1651 crore was derived through a mul- Manmohan Singh kept himself as a
           tiple auction process in those days. But mute spectator.
           in October 2007, when Raja allowed             This criminal silence emboldened
           Reliance and Tata to enter the GSM Raja to go ahead with the allotment of
           field, the mobile subscription of the 2G Spectrum to friendly real estate
           country had gone above 300 million. companies, which were ruling the roost
           Then P Chidambaram was the Finance during his tenure in the Ministry of
           Minister and his objection to allotment Environment and Forests.
           at a cheap rate was not effective due to       To become a telecom operator first
           the compulsions of coalition politics.       one needs to get the licence, which just
             Due to this shabby deal the has only paper value, and then allotment
           Government lost around Rs 30,000 of the valuable Spectrum - the radio
           crore. Sadly, the media, which was sup- magnetic waves to operate in a specific

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              frequency. Spectrum is always a scarce          But Raja’s design to allot 2G Spectrum
              commodity and the Telecom Minister’s met with roadblock due to the unex-
              mind worked like a real estate broker. pected objections of the then Telecom
              Get Spectrum allotment at a cheaper Secretary DS Mathur and Member
              rate and sell it off at a better price, like (Finance) Manju Madhavan. These two
              resale of a flat allotted, later. Those days bureaucrats and the then TRAI
              several applications were pending in the Chairperson Nripendra Misra argued for
              telecom ministry for getting Spectrum the determination of the actual value of
              and obviously everyone was ready to go the Spectrum by auction, rather than
              to any extent to get an allotment.            allotting at the old price of Rs 1651
                It is a known fact that Spectrum crore, fixed seven years eearlier.
              scarcity is an artificially created one to
              mint money for                                                      Role of Swan and
                                      But Raja’s design to allot 2G Spectrum
              those in power and            met with roadblock due to the         Unitech
              that is why in              unexpected objections of the then         Raja’s preferred
              India for the past          Telecom Secretary DS Mathur and         companies Swan
              sixty years the Member (Finance) Manju Madhavan. Telecom                           and
              Spectrum is not at                                                  Unitech, currently
              all audited. No one knows how much known as Etisalat DB India and Uninor,
              we can grant or how much is utilized or respectively, are the major beneficiaries
              un-utilized. The Wireless Planning and of the Spectrum scam. Swan is owned
              Co-ordination (WPC) Advisor in the by Shahid Balwa and Vinod Goenka of
              Department of Telecommunication Dynamix Balwa group, the real com-
              (DoT), the regulator of Spectrum, is pany having powerful connections with
              always a coveted post in India. He politicians from the western India belt
              always parrots on the scarcity of for decades. Balwa and Goenka were
              Spectrum in all high circles of the introduced to Raja during the latter’s
              Capital, according to the wishes of the Environment Ministry days by his
              political masters.                            Cabinet colleague from western India in

                    “The ancient religion of India is doomed, and if Christianity does
                    not step in, whose fault will it be?”

                                               Max Mueller's Letter to the Duke of Argyll,
                                                                 dated 16 December, 1868

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           Eternal India, October 2010

           connection with an environmental clear- instance of Raja for the favours received
           ance for their hotel project on the sea in connection with the allotment of
           shores of Mumbai.                          cross technology. This version seems to
             Swan Telecom, which had earlier be more correct after the expose of con-
           applied for telecom licence in 2006 was troversial telephone tapping records of
           known as Swan Capital and was owned Nira Radia, the controversial lobbyist.
           by     Anil      Ambani’s       Reliance The fact is that all telecom operators
           Communication through their little favoured Raja, but somehow they
           known subsidiaries. Actually, the became envy of Raja’s close connection
           younger Ambani floated Swan to get a with Nira Radia.
           GSM licence, as he was debarred from         Unitech, India’s second largest
           entering the GSM sector those days. But builder, was the client of controversial
           after managing dual technology, powerful lobbyist Nira Radia, who
           Ambani lost interest in Swan. It is a briefs media mostly on behalf of Tata
           known fact in the                                              group.      Unitech
           telecom industry         Due to the close connection with      and Tata had
           that Ambani was           Tamil Nadu Chief Minister M          strategic relations
           forced to sell off     Karunanidhi’s daughter Kanimozhi,       in housing sector
           his    Swan      to    Nira Radia was a preferred choice in    and both got
                                    reaching to Raja for most of the
           Goenka          and                                            Environmental
                                      Spectrum scam beneficiaries.
           Balwa at the                                                   clearances for pan-
           instance of Raja. Though Ambani sold Indian projects in housing during Raja’s
           Swan at an unknown price to these two tenure. Due to the close connection with
           persons close to Raja, his interest in the Tamil Nadu Chief Minister M
           company is still a mystery due to its Karunanidhi’s daughter Kanimozhi,
           puzzling share pattern. Some portion of which was later exposed in the tapped
           the share, around 10 per cent, is owned telephone conversations by the Income
           by Tiger Trustees in Mauritius, which is Tax department and the CBI, Nira Radia
           owned by Zebra Consultants, which was a preferred choice in reaching to
           controls Parrot Consultants. All these Raja for most of the Spectrum scam
           companies having zoological names are beneficiaries. According to the contro-
           from tax havens in the world.              versial communication between the
             In Telecom circles, another version Income Tax and the CBI, out of nine
           floating is that Ambani was forced to companies four were serviced by this
           sell Swan to Dynamix Balwa at the British citizen lobbyist.

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                In a crucial, strategic sector like Opposition parties, objected to this
              telecom, the Unitech gave application unusual method which was already
              for licences in several names. They had declared as illegal and barbarian by the
              applied in the names of Unitech Delhi High Court in a 1994 case. The
              Infrastructure, Unitech Builders and court asked the Government to evolve a
              Estates, Aska Projects, Nahan transparent method to award TV
              Properties, Hudson properties, Volga Channel licences – in that case - and
              Properties, Adonis Projects and Azare said that this method is not suitable for
              properties. But they were able to merge a democratic Government.
              all their licences when Raja made               At first the DoT announced October 1,
              another dubious notification. Some of 2007 as the last date for receiving appli-
              these newly formed companies had not cations from telecom companies. Five
              completed       the     Raja found a way out. He decided to        hundred and sev-
              mandatory incor-         change the last date of application       enty five applica-
              poration formali- from October 1, 2007 to September 25, tions                     were
              ties     regarding    2007, which is quite an illegal method received.            Raja
              commencement of                   of the first order.              found it difficult to
              business      when                                                 allot licences to
              they applied for telecom licence.            Swan and Unitech as the number of
                                                           applicants was huge. Unitech had filed
              Objections by PM and Law Minister            the application on September 24. So
                Overruling the objections of DS Raja found a way out. He decided to
              Mathur, Manju Madhavan and TRAI change the last date of application from
              Chairman Nripendra Misra, Raja initi- October 1, 2007 to September 25, 2007,
              ated the process of allocation of 2G which is quite an illegal method of the
              Spectrum without auction at the cheaper first order.
              rate. Raja followed the principle of first-     If the Government had gone for auc-
              come first-served for allotting Spectrum tion like 3G, think of the rate due to the
              without auction. No one, media or competition by these 575 applicants to

                    “The mythology, as well as cosmogony of the Egyptians, Greeks and
                    Romans were borrowed from the doctrines of the Brahmins.”

                                           John Holwell As quoted in P.J. Marshall, 1970,
                         The British Discovery of Hinduism in the Eighteenth Century, p.46

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           Eternal India, October 2010

           bag the so-called scarce resource - day, ridiculing Bhardwaj, Raja wrote to
           Spectrum. The Government would have Manmohan Singh, demanding permis-
           earned at least Rs.1.5 lakh crore by auc- sion to allot Spectrum on first-come
           tion. But by Raja’s dubious deals the first-served basis and change the last
           Government got only a paltry sum of date of application. A furious Raja even
           Rs.10,000 crore.                             wrote, “the Law Ministry is totally out
             Unexpectedly, Raja faced a hitch from of context”, in bold letters to the Prime
           the Law Ministry, when he sought its Minister.
           opinion on allotting 2G Spectrum                “The Ministry of Law and Justice,
           without auction.                             instead of examining the legal tenability
             On November 1, 2007, ridiculing of these alternative procedures, sug-
           Raja’s designs, Law Minister HR gested referring the matter to eGoM.
           Bhardwaj demanded setting up of an Since generally new major policy deci-
           Empowered Group of Ministers sions of a department or inter-depart-
           (eGoM)           for                                                mental issues are
           deciding on the              The very next day, ridiculing          referred to the
           allocation        of     Bhardwaj, Raja wrote to Manmohan           GoM, and need-
           Spectrum.               Singh, demanding permission to allot less to say that the
             “In view of the        Spectrum on first-come first-served        present       issue
                                      basis and change the last date of
           importance of the                                                   relates to proce-
           case            (2G                                                 dures, the sugges-
           Spectrum allocation) and various tion of the Law Ministry is totally out of
           options indicated in the statement of the context,” wrote Raja to the PM. In his
           case, it is necessary that the whole issue lengthy letter, Raja demanded the PM
           is first considered by an Empowered grant sanction for allotting 2G Spectrum
           Group of Ministers and, in that process, on first-come first-served basis and
           the legal opinion of AG (Attorney urged the need for changing the last date
           General) can be obtained,” said the Law of application five days back. In the
           Minister in a hand-written note, when letter the Minister also claims first-
           the Law Secretary sought his opinion on come first-served as an existing policy.
           Raja’s policy.                                  This letter was delivered to the Prime
             Next is Raja’s shot, which exposes the Minister’s residence at 7:30 pm on
           helplessness of the Congress party over November 2, 2007. It is reliably learnt
           the mighty power of its Dravidian that the letter was drafted by a top most
           alliance partner DMK. The very next legal brain of the Government. This

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              legal officer was drafting the letter Raja lost all balance as the Prime
              against the decision of his boss, the Law Minister unexpectedly shot back a letter
              Minister. But the clever legal wizard, within hours. In the letter dispatched to
              who is in the pay roll of several corpo- Raja’s residence at 9:30pm, PM
              rates, was exposed by Raja’s other letter directed the telecom minister to freeze
              to the Prime Minister, later.                the 2G Spectrum allocation! Raja never
                The UPA-2 elevated this legal - better expected such a lightning reply from
              described as illegal - brain for helping a Manmohan Singh. People in the know
              key Congress leader close to 10 Janpath say Bhardwaj had alerted the PM on the
              in a rape case. The girl who named the great scam in the making.
              Congress leader in an appeal filed             “A number of issues relating to alloca-
              before          the                                              tion of Spectrum
              Supreme Court             Raja lost all balance as the Prime     have been raised
              was brainwashed          Minister unexpectedly shot back a       by telecom sector
              by this legal           letter within hours. In the letter dis-  companies as well
              officer. The girl      patched to Raja’s residence at 9:30pm, as in sections of
              changed her affi-       PM directed the telecom minister to      the           media.
              davit by erasing         freeze the 2G Spectrum allocation!      Broadly, the issues
              the name of the                                                  relate to enhance-
              Congress leader. The petition was with- ment of subscriber linked Spectrum
              drawn in 2006. No TV Channel reported allocation criteria, permission to
              this. The senior judge who approved the CDMA service providers to also pro-
              erasing of the Congress leader’s name vide services on the GSM standard and
              from the girl’s petition was given a be eligible for Spectrum in the GSM
              plum retirement post. The incident, as service band, and the processing of a
              alleged by the girl, took place inside the large number of applications received
              bungalow of a National Women’s for fresh licenses against the backdrop
              Commission member.                           of inadequate Spectrum to cater to
                Coming back to the Spectrum scam, overall demand. Besides these, there are

                    “Human reason can no more reconcile itself to the idea of Patriarchal
                    longevity of few thousand years for the entire span of human race.”

                                              Halhed, As quoted in John Marshall, 1931,
                                           Mohenjodaro and the Indus Civilization, p. 159

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           Eternal India, October 2010

           some other issues recommended by been waiting since last several years,”
           TRAI that require early decision. The said the PM. If he were a powerful
           key issues are summarized in the Prime Minister, would he have had the
           annexed note,” say the first paragraph need to write to Raja in this manner, it is
           of the Prime Minister’s letter.               being asked.
             The second and last paragraphs direct         In the annexure note, Manmohan
           Raja not to do anything in future Singh clearly directs Raja for correct
           without his knowledge. “I would pricing of 2G Spectrum through the
           request you to give urgent consideration “introduction of transparent method-
           to the issues being raised with a view to ology of auction, wherever legally and
           ensuring fairness and transparency and technically feasible.” He also directs for
           let me know of the position before you “revision of entry fee, which is cur-
           take any further action in this regard.”      rently benchmarked on old Spectrum
             In the annexed                                                 auction figures.”
           note, Manmohan            Thoroughly upset on getting the          Thoroughly
           Singh asks Raja to      strongly worded letter within hours      upset on getting
           consider       five     from the Prime Minister, Raja wrote      the        strongly
           points.        The      back to him in a polite manner that      worded         letter
           annexed        note          night itself. The letter dated      within hours from
                                     November 2, 2007 was delivered
           exposes a weak                                                   the           Prime
                                     at the Prime Minister’s residence
           Prime Minister                                                   Minister,       Raja
                                               after midnight.
           and the degrada-                                                 wrote back to him
           tion of the high office. The Prime in a polite manner that night itself. The
           Minister admits that he came to know letter dated November 2, 2007 was
           about the case of allotment of dual tech- delivered at the Prime Minister’s resi-
           nology (cross technology) to CDMA dence after midnight.
           operators through media reports.                Sensing the PM’s anger, Raja evades
             “Based on media reports, it is under- through his courteous reply the con-
           stood that DoT has allowed ‘cross tech- cerns raised on auction and revision of
           nology’ provision of services by CDMA benchmark based on old pricing.
           service providers and three such compa- Hushing up the PM’s direction on con-
           nies have already paid the license fee. ducting auction, Raja politely says he is
           With the deposit of the fee, they would committed to the revolutions in the
           be eligible for GSM Spectrum, for telecom sector. After this exchange of
           which old incumbent operators have letters in the night hours with the Prime

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              Minister, Raja kept quiet in public for           Reiterating auction for 2G Spectrum
              more than a month. But he and his pow- allocation, he also demanded the can-
              erful business-politico coterie were cellation of license given to CDMA
              planning to over-rule the Prime operators to operate in GSM mode and
              Minister, who knowingly preferred to directed to get the actual market price of
              sit in the gallery of coalition games.          Spectrum from them. But nothing hap-
                 Meanwhile, in mid-November 2007, pened, as the then Finance Minister P
              the then Finance Secretary, D Subba Chidambaram who also hails from
              Rao, currently Reserve Bank Governor, Tamil Nadu, knew the consequences of
              wrote to the DoT to go for auction and inviting the wrath of the DMK.
              revise the old pricing of 2G Spectrum.
                 “During       the                                                 Silencing the
              presentation on            After 56 days, Raja again wrote a         Prime Minister
              the        Spectrum          letter to the Prime Minister on           After 56 days,
              policy to the               December 26, 2007. He informs            Raja again wrote a
              Cabinet Secretary         Manmohan Singh that he had con-            letter to the Prime
              on 20 November sulted the External Affairs Minister as Minister                        on
                                                  well in this regard.
              2007, you had                                                        December         26,
              mentioned, among                                                     2007. This letter
              other things, that:                             shows the power of the DMK in the
                                                              Congress-led UPA. Reminding the
              (i) three CDMA operators were given Prime Minister on his demand for the
                  crossover license for GSM opera- allocation of 2G Spectrum as per his
                                                              plan, Raja also informs Manmohan
              (ii) the fee for this license was deter-
                  mined at Rs.1600 crore for all India Singh that he had consulted the External
                  operations….                                Affairs Minister as well in this regard.
              (iii) that one of the licensee has already Those days UPA’s trouble-shooter
                  paid the license fee,” said the Pranab Mukherjee was the External
                  Finance Secretary to DoT Secretary Affairs Minister.
                  DS Mathur.

                    “The Hindus believe that there is no country but theirs, no nation
                    like theirs, no kings like theirs, no religion like theirs, no science
                    like theirs.”

                                                                 Al Beruni, Alberuni’s India

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           Eternal India, October 2010

              The arrogance of Raja can be seen in thereunder to avoid any further confu-
           the letter to the PM. The wordings used sions and delay. The issue wise details
           by the Telecom Minister shows lack of and my decisions are given in the
           respect to the office of the Prime enclosed annexure.” The decisions of
           Minister of a country passing through Raja specified in the annexure note
           murky coalition politics. Raja minced were just opposite to what the PM had
           no words to his opponents in the asked him not to do.
           telecom sector. The GSM operators’           The PM never replied to Raja. His
           body, COAI, which approached Delhi office just sent an acknowledgment
           High Court against his decision, was letter. The PM was literally silenced.
           described in the unkindest words.            Here the big question is how Pranab
              “The only malicious intention of Mukherjee, who was holding External
           COAI, it appears, is that they want to Affairs, and the then Solicitor General
           procrastinate the issues through frivo- GE Vahanvati can advise Raja against
           lous and vexa-                                                 the decision of the
           cious court pro- This letter was leaked to the media by Prime Minister.
           ceedings        end- Raja himself out of anger in the night More over both
           lessly,” alleged        durbar of his friendly journalists,    had no role legally
           Raja. How a            when the CBI conducted raid on the      and officially in
                                      DoT headquarters and other
           Minister can use                                               advising        the
                                     companies on October 22, 2009.
           such arrogant lan-                                             Telecom Minister,
           guage while writing to the Prime that too against the directions of the
           Minister? Courtesy to the coalition pol- Prime Minister.
           itics or is it a weak Prime Minister         This letter was leaked to the media
           remotely controlled?                       by Raja himself out of anger in the
              Reiterating his decision to allot night durbar of his friendly journal-
           Spectrum on first-come first-served ists, when the CBI conducted raid on
           basis by advancing the last date of the DoT headquarters and other com-
           application, Raja sums up the letter: “In panies on October 22, 2009. Raja’s
           these circumstances, the discussions aim was to inform the world
           with the External Affairs Minister and that he has done all these things
           Solicitor General of India have further with the concurrence of Pranab
           enlightened me to take a pre-emptive Mukherjee and blackmail the
           and pro-active decision on these issues Congress party.
           as per the guidelines and rules framed       After the CBI raid, Raja always

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              claimed he got the PM’s consent in including Attorney General and
              allotting 2G Spectrum. But his claims Solicitor General, shall not “advise any
              were proved wrong after The Pioneer Ministry or Department of the
              (October 28, 2009) exposed the night- Government of India or any statutory
              long communications between him and organisation or any Public Sector
              Prime Minister and the objections of Undertaking unless the proposal or a
              HR Bhardwaj.                                reference in this regard is received
                Of course, in Pranab Mukherjee’s through the Ministry of Law and
              case, Raja can argue he took his advice Justice, Department of Legal Affairs”.
              considering his stature in the Cabinet.       Vahanvati is still keeping stony
              When I asked Mukherjee during silence on this issue. Had he got clear-
              Parliament session, after a week of this ance from the Law Ministry to advise
              incident, he denied Raja’s claim and the Telecom Minister on allotment of
              told me that he                                                 2G Spectrum on
              never advised him       Had he got clearance from the Law       first-come first-
              on 2G Spectrum            Ministry to advise the Telecom        served basis by
              matters. He told Minister on allotment of 2G Spectrum advancing the last
              me that Raja came       on first-come first-served basis by     date (cut off date)
              to his residence       advancing the last date (cut off date)   of     application,
                                      of application, which resulted in a
              occasionally in                                                 which resulted in a
                                    loss of more than Rs one lakh crore to
              connection with                                                 loss of more than
                                                the exchequer?
              the discussions on                                              Rs one lakh crore
              the issue of settling the vacation of to the exchequer? For wrongly advising
              Spectrum held by Defence establish- Raja, he has been promoted as Attorney
              ments. Those days a dispute was going General of India by the UPA-2! Who are
              on between the Defence Ministry and his protectors, even after advising
              the DoT on this matter, he claimed.         against the Prime Minister’s directions?
                But what about Vahanvati, who is now
              elevated as the Attorney General of The Grand Execution of the Loot
              India? What is his locus standi in            On December 31, 2007, DoT
              advising the Telecom Minister against Secretary DS Mathur, the man who
              the directions of his boss, the Law stood as an obstacle in 2G Spectrum
              Minister Bhardwaj? As per the Rule allocation retires. Another obstacle,
              8(1)(e) of the Law Officer (Conditions Manju Madhavan, took voluntary retire-
              of Service) Rules, 1987, a Law Officer, ment a few weeks earlier. Raja brings

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           trusted lieutenant Siddarth Behura the the Sanchar Bhawan, where the Access
           as new Telecom Secretray, who worked Service Department functions, became
           with him earlier as Additional Secretary a crowded market, the CEOs attacking
           in the Environment Ministry.                  each other.
             Within ten days the 2G Spectrum was           A big drama was also going on inside
           allotted in the most controversial Raja’s office in the second floor of the
           manner. On January 10, 2008 around building then. According to the confes-
           2:45 pm, the DoT uploads a press sions of senior officials to CBI investi-
           release on its website. The press release gators, Raja’s favourites Swan and
           said the last date of application or cut Unitech owners were sitting at his
           off date was shifted from the earlier Private Secretary RK Chandolia’s
           fixed October 1, 2007 to a previous date chamber. The officials of Access
           of September 25, 2007.                        Service were asked to come down to
             The press release continued with the Private Secretary’s chamber and
           unusual announcements. It also asked collect the licence fee and applications
           the telecom opera-                                                from the Swan
                                       Here the question is how these
           tors to remit the                                                 and       Unitech
                                      companies, including Swan and
           licence         fee                                               people. Swan was
                                   Unitech, arranged high value demand
           through demand           drafts of value ranging from Rs.500      given No. 1 status
           draft on the same            crore to Rs. 1651 crore in just      and Unitech was
           day between 3:30                      45 minutes.                 given No. 2 status.
           pm and 4:30 pm at                                                 Then only the
           the DoT’s Access Service Department counter for receiving application and
           in the Sanchar Bhawan, New Delhi. fee from others was opened at the
           What is the rationale behind demanding eighth floor. The rest seven companies
           licence fee, amounting to Rs.1651 crore were fighting among themselves to
           (value of pan-Indian licence for all the become first in the queue, while the
           22 circles in the country), that too in a bigger drama was going on in Raja’s
           demand draft format within 45 minutes? office.
             Then witnessed a mad rush in the              Here the question is how these com-
           Sanchar Bhawan, the telecom operators panies, including Swan and Unitech,
           running to be first in the queue to get the arranged high value demand drafts of
           licence and the Spectrum. Bouncers value ranging from Rs.500 crore to Rs.
           were brought by some companies to 1651 crore in just 45 minutes. It is
           kick out the rivals. The eighth floor of obvious that the entire episode was pre-

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           Eternal India, October 2010

           planned and all the operators were given Corruption Comes to Public Domain
           information in advance, by at least one       Four days after the ‘robbery’, on
           or two days. The explosive Nira Radia January 14, 2008, agitated TRAI
           tapes prove that this episode was a Chairman Nripendra Misra wrote to the
           planned one by Raja and out of the nine DoT Secretary that he was astonished to
           beneficiary companies, four were serv- hear the 2G Spectrum allocation in a
           iced by her.                               barbarian way from the media and other
              Newspapers downplayed this blatant sources. He blamed the DoT and
           violation and high voltage drama of Telecom Ministry for cherry-picking his
           January 10, 2008 at the Telecom head- recommendations, and aired his objec-
           quarters. The Telecom and business cor- tions.
           respondents who were well aware of            Some of the media persons like
           this daylight robbery preferred to keep Paranjoy Guha Thakurata, Sunil Jain
           quiet. Nobody was that time aware of and Shalini Singh exposed this huge
           the           word                                              scam while some
                                   Worst was the role of the TV news
           Spectrum and the                                                news agencies and
                                  channels. They did nothing to expose
           common man was                                                  others extracted
                                  this scam. The very first reason is the
           literally ignorant        advertisement revenue from the        their quota of hush
           of the intricacies      mighty telecom sector. Then, the TV     money. Being on
           of the allotment channels’ Spectrum is also controlled the pay roll of the
           and its value to the                by the DoT.                 mighty telecom
           n a t i o n a l                                                 operators       for
           exchequer.                                 years, some unscrupulous media per-
              Worst was the role of the TV news sons joined the bandwagon of Raja,
           channels. They did nothing to expose floating theories in his defence. All
           this scam. The very first reason is the newspapers and channels also benefited
           advertisement revenue from the mighty from a good crop of lavish advertise-
           telecom sector. Then, the TV channels’ ments from public sector telecom com-
           Spectrum is also controlled by the DoT. panies and others who had something
           Therefore they preferred to limit their substantial to hush up.
           role in just airing the sound bites and       Nira Radia tapes of the CBI and the
           kept quiet about the corruption. Then Income Tax had a special mention on
           again, the telecom beat in all media noted journalists involved in the
           houses is handled by the business Spectrum scam and indulging in lob-
           bureaus, where only money matters!         bying for Raja’s re-entry in UPA-2.

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                The 2G Spectrum came to the com- had objected in giving clearance to the
              monman’s attention only after months – deal. But again compulsions of coalition
              mid 2008 – when the beneficiary com- politics forced him and the UPA-2 to
              panies started offloading their shares at clear the deal.
              magical figures.                                Within weeks of allotting the
                The Swan Telecom bagged the licence Spectrum licence to Swan, Raja helped
              for Rs.1537 crore for operating in 13 it have a strategic arrangement with the
              circles. Within months – September State-owned BSNL, literally for free. A
              2008 - it sold 45 per cent of its shares to memorandum of understanding (MoU)
              Etisalat, the telecom giant in UAE for on September 13, 2008 between BSNL
              900 million US dollars (Approximately and Swan, called the Intra-Circle
              Rs.4500 crore). Swan is currently Roaming Agreement, does not indicate
              known as Etisalat DB India Limited.           even a nominal sum that BSNL is
                Similarly, Unitech, another real estate charging for sharing its infrastructure.
              company, entered                                                Incidentally, this is
                                       A memorandum of understanding
              into a bumper                                                   the first deal of its
                                     (MoU) on September 13, 2008 between
              deal,       without                                             kind that the
                                       BSNL and Swan, called the Intra-
              investing anything Circle Roaming Agreement, does not BSNL has entered
              in telecom infra-        indicate even a nominal sum that       into with any pri-
              structure.      The BSNL is charging for sharing its infra- vate player. The
              company had got                        structure.               BSNL has been
              licence to operate                                              rather secretive of
              in 22 circles for Rs.1651 crore. Within its charitable attitude towards Swan. Its
              weeks, it sold 60 per cent of its shares website does not have a word on this
              for Rs.6120 to the Norwegian company important development wherein a
              Telenor, which is currently a major public organisation offers its services
              telecom player in Pakistan and for free to a private party.
              Bangladesh. Unitech is currently known          The BSNL’s management committee
              as Uninor.                                    sought to charge 52 paisa/call from
                Unitech’s deal with Telenor had faced Swan for this new deal. But this deci-
              objection from the Home Ministry in sion did not appear in the MoU and
              the initial days due to the latter’s pres- those days BSNL heads were forced to
              ence in Pakistan and Bangladesh. It is a describe this uncommon agreement as
              known fact that P. Chidambaram who “Limited MoU”. The BSNL was arm-
              by then shifted to the Home Ministry twisted to enter into this MoU just a few

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           Eternal India, October 2010

           days before Swan’s bumper dealing MA Parameswari, appointed on the
           with Etisalat. This MoU helped Swan to board of directors of Green House and
           demand US $900 million from Etisalat. Equaas Estates. This he did by violating
             The first one to oppose this was the another code - the service rules and the
           Left parties, basically CPI(M). code of conduct for Ministers.
           Somehow its junior cousin CPI pre-              As a Cabinet Minister, Raja had to
           ferred to keep quiet. Some BJP leaders inform the Prime Minister about his
           also started airing the magnitude of the wife’s business, and file a mandatory
           scam in and outside Parliament.               affidavit saying there was no clash of
             As and when the protests came, Raja interest in the discharge of his duties.
           and his mentor Karunanidhi preferred to He did neither. The Minister now
           raise the Dalit card. My newspaper The defends himself by saying the entries
           Pioneer decided to start an investigation with the Registrar of Companies are
           at this point and Editor Chandan Mitra wrong, and that he and his wife were not
           took the risk of                                                   aware that she was
           locking horns with        As a Cabinet Minister, Raja had to       a     director    in
           the         mighty       inform the Prime Minister about his       Equaas!          The
           telecom industry wife’s business, and file a mandatory Equaas Estates’
           and all behind the affidavit saying there was no clash of domestic turnover,
                                   interest in the discharge of his duties.
           scam. Fortunately,                                                 on the other hand,
                                                He did neither.
           I got all details                                                  showed more than
           from behind the curtain.                      Rs 755 crore in its very first year. Even
             A series of investigative reports this, Raja now says, was a “wrong
           appeared from December 2008. The entry” in the books of the Registrar of
           Telecom Minister’s money parking Companies. Now Raja’s claim is that
           methods — by floating companies in this huge figure is typographical error.
           the names of close relatives — was soon Meanwhile, Green House Promoters
           out in the open. After Raja became a opened an office in Singapore in viola-
           Union Minister in 2004, many of his tion of Indian foreign exchange norms.
           close relatives started real estate compa- The entry of inflated figures in the bal-
           nies. Companies like Green House ance-sheets was a purposeful act to
           Promoters, Equaas Estates and Kovai highlight the prospects while dealing
           Shelter Promoters have Raja’s brothers, with banks in foreign countries. In a
           nephews and nieces as directors on their later case, Satyam’s Ramalinga Raju
           boards. The Minister even got his wife, reportedly did a similar fraud.

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                Meanwhile, Raja announced the allo- gation as the latter desired. But, demor-
              cation of 3G Spectrum waves. He alising the CVC, the Prime Minister
              announced the base price at Rs.1650 again made Raja the Telecom Minister.
              crore first, changed to Rs 2020 crore          Fortunately, shocking the UPA
              later. His intention was to conduct a Government, Sinha on October 14,
              simple auction allowing more players to 2009 confirmed the scam and ordered
              reduce the price. But things were going the CBI to investigate the conspiracy
              out of control and the government angle and all murky details behind this
              decided to constitute an EGoM headed biggest loot. The Enforcement
              by Pranab Mukherjee.                         Directorate also initiated action. But,
                The Government got more than one like the CBI, they also kept quiet,
              lakh crore rupees from the transparent waiting a nod from the political masters
              auction of 3G and BWA Spectrum. 3G of the Congress party.
              and BWA are used by just below 10 per-         The CVC findings made it clear that
              cent of the total                                                 the 2G Spectrum
              mobile          sub- Shocking the UPA Government, Sinha allocation on first-
              scribers. So we          on October 14, 2009 confirmed the        come first-served
              can assume how              scam and ordered the CBI to           basis was totally
              much money we           investigate the conspiracy angle and      unacceptable. It
                                         all murky details behind this
              would have got if                                                 also declared that
                                                   biggest loot.
              2G, which is used                                                 the DoT violated
              by nearly 90 percent of the mobile sub- TRAI recommendations and the allot-
              scribers, were auctioned.                    ment of Spectrum in 2008 at a price
                                                           fixed in 2001 was totally illegal. The
              CVC Intervention                             CVC also disapproved of the changing
                Raja faced first heat when the Chief of application filing date and declared
              Vigilance Commissioner Pratyush the entire procedure as totally wrong.
              Sinha took a bold step to order investi-
              gation into the violations in the allot- Tamil Nadu Connection Exposed
              ment of 2G Spectrum. Before the                As and when the allegation was raised
              General Election in May 2009, in its Raja used to say “all the beneficiaries
              preliminary findings, the CVC said bla- are north or west Indian companies and
              tant illegalities were committed. Sinha no one from Tamil Nadu is benefited.”
              had been in touch with Manmohan He was telling a blatant lie. Apart from
              Singh about the progress of the investi- Etisalat, the Swan Telecom allotted 10

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           Eternal India, October 2010

           percent of the shares, worth Rs.380          The ETA Group entered into an MoU
           crore, to a small company called Genex with the Tamil Nadu Government for
           Exim from Chennai. This tiny company setting up an IT Special Economic Zone
           with just Rs 1 lakh capital was formed worth Rs 3,750 crore when Raja
           just six days before it was allotted the became the Union Telecom Minister in
           10 per cent shares in the last week of May 2007. Tamil Nadu Chief Minister
           September 2008.                            M Karunanidhi was present at the
             According to documents filed with the much-hyped MoU-signing ceremony
           Registrar of Companies in Chennai, for the project. It was proposed to be set
           Genex was incorporated on September up in Kancheepuram, near Chennai, on
           17, 2008, with two directors - a 500-acre plot. It is mysterious that a
           Mohammed Hassan (58) and Ahamed major business group should enter
           Shakir (41). The company was repre- Swan’s board through a company with a
           sented by Ahmed                                                 meagre Rs 1 lakh
           Syed Salahuddin           Ahmed Syed Salahuddin is the          paid-up capital.
           (32) on the board       younger son of Syed Mohammed            I n c i d e n t a l l y,
           of Swan. The three     Salahuddin, an NRI business tycoon       Genex           Exim,
           belong            to   heading the Dubai-based real estate      having acquired
           Kilukarai, a small    conglomerate, ETA Ascon Star Group, more than 10 per
                                  which began its Indian operations in
           coastal village in                                              cent of Swan
                                   2006 by floating several real estate
           Ramanathapuram                                                  Telecom shares,
                                         firms across the State.
           district of Tamil                                               has not filed any
           Nadu.                                      document with the authorities to show
             The Tamil Nadu link now gets its source of income.
           strengthened. Ahmed Syed Salahuddin          When ETA Group and its chief Syed
           is the younger son of Syed Salahuddin were named in connection
           Mohammed Salahuddin, an NRI busi- with the Spectrum deal, AIADMK chief
           ness tycoon heading the Dubai-based Jayalalithaa came out with stunning
           real estate conglomerate, ETA Ascon details about the four-decade long con-
           Star Group, which began its Indian nection between Salahuddin and
           operations in 2006 by floating several Karunanidhi.
           real estate firms across the State. Raja     Salahuddin had started his career as a
           was then the Union Environment small-time PWD contractor in Tamil
           Minister and his party, the DMK, had Nadu when Karunanidhi became PWD
           assumed power in Tamil Nadu.               Minister in 1967. His first business ven-

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              ture, the East Coast Constructions, had The Courts and the Shabby Deals
              built most of the flyovers in Chennai          The Spectrum controversy entered the
              city and across the state. Salahuddin court rooms by the end of 2008. One
              was the distributor of Karunanidhi’s PIL activist Arvind Gupta approached
              first son MK Muthu’s maiden film. The Delhi High Court challenging the
              link between Karunanidhi and Spectrum allocation on first-come first-
              Salahuddin was mentioned in the served basis. At one point the High
              Sarkaria Commission, appointed by Court observed that the 2G Spectrum
              Prime Minister Indira Gandhi, who dis- was “sold like cinema tickets”. But at
              missed Karunanidhi Government for the last stage of the case, mysteriously,
              corruption during the emergency days. Arvind Gupta withdrew from the case.
              The murky deal of Tamil Nadu                   The second and the most serious case
              government of those days was heavily was filed by the telecom operator STel.
              criticized by Justice Sarkaria in This company challenged the reversal
              his report and Salahuddin had started his career as a of the cut-off date
              he      coined    a    small-time PWD contractor in Tamil        from October 1,
              word – Scientific        Nadu when Karunanidhi became            2007 to September
              Corruption.           PWD Minister in 1967. His first busi-      25.    STel    got
                The          UPA          ness venture, the East Coast         licence to operate
              Government in          Constructions, had built most of the      in three circles
                                      flyovers in Chennai city and across
              2006 had hon-                                                    only due to the
                                                    the state.
              oured Salahuddin                                                 illegal change of
              with Pravasi Bharatiya award. This last date for application. It had applied
              NRI tycoon is still active in the affairs for licences for all the 22 circles (pan-
              of the State Government. The Indian licence), but due to the reversal
              Government’s public health insurance of last date of application, the DoT con-
              project is administered by his another sidered them only in three circles.
              company called Star Insurance.                 In June 2009, the single bench of
              Moreover, Salahuddin was the con- Justice Sistani delivered judgment
              tractor of the State Government’s new declaring the Spectrum allocation as
              Legislative Complex and State illegal, citing that the change of applica-
              Secretariat, which was jointly inaugu- tion filing date cannot be acceptable in
              rated by Prime Minister Manmohan law. It termed the DoT move as
              Singh and Congress president Sonia “changing the rules of the game after it
              Gandhi in March 2010.                        started.” The judgement found the DoT,

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           Eternal India, October 2010

           Telecom Ministry, Law Ministry and letter.
           Attorney General Vahanvati had com-             Ignoring the huge value of STel, Raja
           mitted blatant crime. The DoT’s affi- had allotted 2G Spectrum’s pan-India
           davit claimed that Raja had got clear- license at cheap price of Rs.1651 crore.
           ance from the Prime Minister for The high value the government got from
           changing the last date of application!        3G ratifies the STel’s offer of Rs.17,752
              The DoT produced in the court only crore for 2G license. From 3G auction
           Raja’s letter to the Prime Minister on the pan Indian license rate arrived at was
           November 2, 2007, seeking sanction for Rs. 16,751 crore. The hefty offer from
           changing the last date (cut-off date) of STel exposes the actual figure of looting
           application and to allot Spectrum on happened in Raja’s shabby allotment of
           first-come first-served basis. But DoT 2G Spectrum. How can Prime Minister,
           hushed up the Prime Minister’s reply to known as an economist act like an inno-
           Raja objecting the demands.                   cent in this incident?
              The same false                                                      Misquoting of
                                   Justice Sistani delivered judgment
           affidavit was filed                                                  the Prime Minister
                                  declaring the Spectrum allocation as
           in the appeal by                                                     in the court affi-
                                     illegal, citing that the change of
           the DoT in Delhi         application filing date cannot be           davits appeared in
           High Court Chief       acceptable in law. It termed the DoT          the media and the
           Justice’s bench         move as “changing the rules of the           DoT withdrew that
           also. Chief Justice            game after it started.”               claim in its appeal
           AP Shah rejected                                                     to the Supreme
           the DoT appeal on December 2009 and Court. The DoT approached Supreme
           ratified the single Bench verdict, Court Chief Justice Bench in January
           declaring the Spectrum allocation as 2010 for staying the judgment of Delhi
           illegal. The Chief Justice’s judgment High Court. The bench was headed by
           also mentions the misquoting of the Chief Justice KG Balakrishnan. Later the
           Prime Minister.                               case was shifted to another bench com-
              Both the above judgments also expose prising Justices B Sudershan Reddy and
           another shocking fact. The STel had SS Nijjar.
           offered to DoT, Raja and the Prime              Meanwhile, Janata Party president Dr
           Minister Rs.17,752 crore as pan-Indian S Subramanian Swamy impleaded into
           licence. The judgments say the STel the case. Raja sensed danger. Swamy
           offered this huge value to the Prime had already sought the Prime Minister’s
           Minister on November 5, 2007 through a sanction for prosecuting Raja.

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                 In the first week of March 2010, just a before the Delhi High Court on
              few days before the next sitting of the Spectrum scam. Both were filed by
              bench, DoT issued an order to STel to Subramanian Swamy. One is for
              immediately shut down its services in seeking a direction to the Prime
              three circles, citing some “grave secu- Minister for not taking a decision for the
              rity concerns”. This order was served on past 20 months on the application for
              a Friday, after office hours, without sanction to prosecute Raja. The second
              seeking any explanation from the com- is for the cancellation of 2G Spectrum
              pany’s side. Later Home Ministry offi- allocation and conduct on auction like
              cials clarified that they were not aware in the case of 3G.
              of any such security concerns.                 The Comptroller and Auditor General
                 This threat from the DoT forced STel (CAG) is expected to submit a report on
              to withdraw the case from the Supreme the Spectrum scam soon. The Public
              Court. On Monday the Attorney General Accounts Committee (PAC) investiga-
              Vahanvati        pro-                                              tion is also going
              duced in the court         But giving a setback to Raja, the       on.    Will     the
              the letter from             Supreme Court, after hearing           Government listen
              STel on its deci-        Swamy’s contention, decided not to        and take action on
              sion to withdraw         intervene in the judgment of Delhi        these two reports?
                                         High Court, which declared the
              from the case. The                                                   The unfortunate
                                          Spectrum allotment as illegal.
              court sensed foul                                                  thing is that never
              play and directed to follow the proce- any discussion was allowed in the Lok
              dures of withdrawal. The company was Sabha on this loot, though some MPs
              asked to file the papers through an affi- had given notice. One source close to
              davit. But giving a setback to Raja, the Lok Sabha Speaker Meira Kumar made
              Supreme Court, after hearing Swamy’s a flimsy observation that Raja had
              contention, decided not to intervene in written a letter against discussion, citing
              the judgment of Delhi High Court, which that the issue was sub judice as several
              declared the Spectrum allotment as cases were going on in the courts on the
              illegal. The main issue then is the matter. What an excuse? Then how the
              Government kept silent on this judgment Lok Sabha had discussed Ayodhya-
              on flimsy reasons that the court had not Babri masjid dispute, Bofors scam,
              directed to cancel the Spectrum alloca- Gujarat riots, 1984 Sikh riots etc. There
              tion, nor to execute the judgment.           are still cases going on on these issues.
                 At present only two cases are pending Here the question is why the Opposition

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           Eternal India, October 2010

           parties were silent when notices for dis-       telephones for nearly 300 days and the
           cussion were not approved.                      transcripts are really explosive.
             When Nira Radia tapes created chaos             But the CBI is ineffective due to the
           in the Lok Sabha, Pranab Mukherjee              coalition politics. As and when the issue
           with folded hands assured that the gov-         heats up, Karunanidhi lands in Delhi in
           ernment would debate the issue, soon            wheelchairs to save Raja. But what is
           after the passing of Finance Bill. The          the Opposition doing is the million
           Finance Minister also assured that he or        dollar question! One thing is sure, some
           Prime Minister would answer on this             persons – cutting across political lines –
           issue. Nothing happened and govern-             accepted their quota of hush money
           ment literally went back from the               from the Spectrum looting.
           promise of holding the debate on Nira             Already certain telephone transcripts
           Radia tapes. It is obvious that some            between Raja and Nira Radia appeared
           leaders, cutting across political lines are     in the TV channel, Headlines Today.
           doing floor management in hushing up            One interesting point in the conversa-
           the issue.                                      tion is Raja asking Nira Radia whether
             We can understand the people from             his name had been cleared to become
           Treasury Benches trying to saving the           Minister again. Nira Radia categorically
           Prime Minister from facing unwelcome            assures him that his name was cleared in
           situations. But why the Opposition is           the previous night itself. Here the ques-
           keeping silence? It is the duty of the          tion is who gave confirmation to Nira
           Opposition to expose the government             Radia on retaining Raja again in the
           on the floor of the House.                      Cabinet. Anyway Raja doesn’t need
                                                           information from Karunanidhi through
           Expose of Nira Radia Tapes                      Nira Radia. It is obvious that a person or
             The expose of the telephone tapping of        persons from the Congress informed
           Nira Radia and Raja confirms the shady          Nira Radia about the decision of
           deals in the 2G Spectrum allocation. The        retaining Raja in the Cabinet. Who
           Income Tax department has tapped the            is/are that?


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