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J Gopikrishnan_blb.qxd 9/27/2010 2:07 PM Page 59
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-
T
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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Spectrum
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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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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Spectrum
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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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-
application.
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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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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Spectrum
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
tions;
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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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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Spectrum
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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Spectrum
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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Spectrum
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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Spectrum
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?
80
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