The special CBI court has pronounced its verdict in the 2G scam case today: It found no one guilty on the basis of evidence presented to it.
But the comprehensive timeline of the case, given below, throws up what looks like a scam, if one connects the dots.
In May 2004, A Raja became the Union Minister for Environment and Forests. He shifted to the Ministry of Communications and Information Technology (IT) on 16 May, 2007. Real estate companies close to Raja wanted to venture into telecom business. Thus, Raja decided to grant licences and spectrum to new players. He informed of his decision to Telecom Secretary D S Mathur, who objected to it and recommended that transparent auction and competitive pricing (as also recommended by Telecom Regulatory Authority of India from 2003 onwards) should take place.
Raja wanted to grant licences on a first-come-first serve basis (preference to those who pay licence fee first rather than those who apply first) at prices fixed in 2001. In 2001, there were only four million mobile subscribers which had ballooned to 350 million by mid-2007.
Manju Madhvan, member (Finance) of Department of Telecom (DoT) and Finance Secretary D Subbarao also pointed out the new competitive prices and recommended the auction route. But Raja ignored all these suggestions and sent the file to the Law Ministry for its opinion and initiated the process.
On 24 September 2007, DoT issued a press release (in late evening) which appeared in newspapers the next day. It cited the last date of application (cut-off date) as 1 October 2007. Now, without Cabinet approval, Raja allotted Dual Policy or Cross Technology to Reliance Communications, Tata TeleServices and Shyam Telecom in October 2007 at a rate fixed in 2001. This technology allowed Code Division Multiple Access (CDMA) operators to change to much sought after GSM technology. CDMA operators were in bad shape and Raja’s decision came as a boon to them. It gave them much sought-after GSM licence at a six-year-old price. This was allegedly Raja’s first major act of corruption in the telecom arena, which bolstered him enough to go ahead with 2G spectrum allocation to new companies.
On 1 November 2007, the Law Minister H R Bhardwaj rejected Raja’s plan and directed to constitute an Empowered Group of Ministers (eGoM) to form transparent procedures for 2G spectrum allocation and new licences. Next day by 8 pm, Raja wrote a letter to then prime minister Manmohan Singh objecting to Bhardwaj’s direction. “Law Ministry is out of context,” he wrote. This letter was delivered to the PM’s residence. Within an hour (probably alerted by Bhardwaj), the PM wrote to Raja asking him to stop all procedures and directed him to get his concurrence in all future actions. This letter was delivered to Raja’s residence. Citing several wrong practices in the past, the PM directed Raja to adopt transparent method by auction with new pricing.
At midnight, Raja gave an evasive reply to the PM, hushing up the directions for auction and competitive pricing. This was also delivered to the PM’s residence. In the letter to Raja, the PM had said that he came to know about the allotment of dual policy (cross technology) by Raja through the media.
The then Solicitor General (SG) was present at Raja’s residence on 2 November from 7 pm to 11.30 pm. He had drafted both the letters to the prime minister and was later elevated in United Progressive Alliance (UPA)-2 thanks to his alleged nexus with all unholy elements in politics and the corporate world. How can a law officer advise against law minister’s direction? Rule 8(1)(e) of Law Officers (Conditions of Service) Rules 1972 states : “A Law Officer (including AG/SG/ASG or any other law officer) shall not advise any Ministry or Department of Government of India or any statutory organization or any PSU unless the proposal or a reference in this regard is received through Ministry of Law and Justice, Department of Legal Affairs.”
On 22 November 2007 Finance Secretary D Subba Rao wrote to Telecom Secretary D S Mathur objecting to the pricing policy of 2G spectrum and arguing for auction. In the letter, the Finance Secretary objected to the dual policy (cross technology) implemented to help CDMA operators like Reliance and TATA to more lucrative GSM technology at throwaway prices without cabinet approval.
The CAG report pegged loss at around Rs 36,000 crore to the exchequer due to dual policy which benefited mainly Reliance and TATA. The CAG put the total loss to Rs 1.76 lakh crore, including the loss accrued due to adoption of dual technology policy.
Strong resistance by Telecom Secretary Mathur and Manju Madhavan prevented Raja from moving ahead. For suggesting a series of steps for auction, Raja snubbed Madhvan (in an internal note dated 4 December 2007) who took VRS soon after.
After 50 days, on 26 December 2007, Raja wrote a letter to the PM, saying that he was “further enlightened” by the then External Affairs Minister Pranab Mukherjee and the then Solicitor General G Vahanvati to go ahead with “pre-emptive and pro-active” decision to allot 2G spectrum and new licences. In these letters also, Raja argued for reversing the cut-off date limit the players. The PM did not reply, but simply gave a routine acknowledgement on 3 January 2008.
On 31 December 2007, Mathur retired. Raja brought his trusted man Siddarth Behura as the new Telecom Secretary, who worked as an Additional Secretary with him at the Ministry of Environment and Forests. Within 10 days, on 10 January at 2.45 pm DoT uploaded a press release saying that cut-off date was reversed from 1 October 2007 to 25 September 2007. The press release asked the new players to remit fee (huge money ranging from Rs 1,500 crore to Rs,1,600 crore) between 3.30 pm and 4.30 pm on same day. It is a mystery that how nine new companies remitted huge fee by demand draft within 45 minutes.
Here is the conspiracy angle. All the nine company owners/brokers had a meeting with Raja on 9 January 2008 at his residence. All were informed by the minister 24 hours before the issue of press release. The cut-off date was changed to 24 September 2007, because Unitech and Swan had applied on 24 September - both firms which Raja intended to favour.
On 10 January 2008, the CEOs of Swan and Unitech met Private Secretary R K Chandolia at his cabin in Sanchar Bhavan. DDG Access Service (A K Srivastava) directed officials to go to Chandolia’s cabin at 3 pm. Chandolia asked the officials to collect applications and demand drafts from CEOs and directed to give Number 1 status to Swan and Number 2 status to Unitech. Then only counter was opened at eighth floor of Sanachar Bhavan to receive application fee from the other seven companies. There was a mad rush to be first in the queue and physical fight took place between rivals. Bouncers were brought. CEOs quarrelled with each other and some telecom officers were manhandled. Though police arrived, no case was registered on instruction from Chandolia.
On 14 January 2008 TRAI Chairman Nripendra Misra wrote a letter to Telecom Secretary Siddharth Behura objecting to the policy, reversal of cut-off date and manipulating his recommendations. Later, to the media, Misra described that DoT had “cherry picked” his recommendations.
As per Section 11(1)(a)(ii) and Section 11(1)(d) of the TRAI Act, DoT is mandated to get the recommendation of TRAI if the licence is to be issued to new operators. But Raja never sought recommendation of TRAI when he allotted licence to new operators like Swan Telecom – changed name to Etisalat DB Telecom, Unitech group companies changed name to Uninor, Loop Telecom (licence was granted in the name of Shipping Stop Dotcom India Pvt Ltd), Datacom – changed name to Videocon, STel and Allainz Infra (merged/amalgamated with Etisalat later with their licence in two circles.
In March-April 2008 DoT allotted spectrum/licences, including additional spectrum, to existing players to settle anger. All files were signed by Raja. Unitech applied licences in different names - Unitech Infrastructure, Unitech Builders and Estates, Aska Projects, Nahan Properties, Hudson Properties, Volga Properties, Adonis Projects and Azare Properties. Later Unitech Group forms eight companies – Unitech Wireless (Tamil Nadu), Unitech Wireless (North), Unitech Wireless (South), Unitech Wireless (Kolkata), Unitech Wireless (Delhi), Unitech Wireless (East), Unitech Wireless (Mumbai), Unitech Wireless (West).
On 22 April 2008, a dubious order was issued by Siddhart Behura for facilitating a merger (leaving the word acquisition). This helped Unitech to merge all their licences and helped all to waive the mandatory three-year lock-in-period in selling of their shares.
On 13 September 2008, Raja forces BSNL CMD Kuldip Goyal to enter into an un-precedented MoU with Swan, known as Intra-Circle Roaming Agreement. This MoU would help Swan to use all infrastructure (towers, optical network etc) of BSNL. This MoU was executed just a week before Swan’s Rs 4,500 crore deal (sale of 45 per cent shares) with Etisalat. Swan gave unsolicited application to BSNL. The BSNL management committee demanded 52 paise/call from Swan. But this clause was absent in the MoU. Raja also transferred senior officials in WPC (Joint Wireless Adviser RJS Kushwaha and Deputy Wireless Adviser D Jha) for objecting to Swan’s proposals to BSNL and DoT.
In September-October 2008, Swan offloaded 45 per cent shares to UAE-based Etisalat for Rs 4,500 crore (Swan got licence for Rs 1,530 crore). Etisalat invested Swan through its Mauritius unit. Unitech offloaded 60 per cent of shares to Norway-based Telenor for Rs 6,200 crore (Unitech got licence for Rs 1,621 crore). Telenor invested through its South-Asia division. Telenor is a major operator in Pakistan and Bangladesh.
On 4 November 2008, Swan informed DoT that it had allotted Rs 380 crore worth shares (9.9 per cent) to a Chennai based newly floated company Genex Exim. This is believed to the kickback from Swan to Raja. Genex was incorporated on 17 September 2008, with two directors – Mohammed Hassan (58) and Ahamed Shakir (41). The company was represented by Ahmed Syed Salahuddin (32) on the board of Swan. The three belong to Kilukarai, a small coastal village in Ramanathapuram district of Tamil Nadu. The Tamil Nadu link now gets strengthened. Ahmed Syed Salahuddin is the younger son of Syed Mohammed Salahuddin, an NRI business tycoon heading the Dubai-based real estate conglomerate, ETA Ascon Star Group. This was part of the letter to DoT informing the Rs 4,500 crore deal with Etisalat.
ETA Group had several real estate projects cleared during Raja’s stint in the Environment Ministry. Moreover the ETA owner Syed Mohammed Salahuddin was having a four-decade long association with Tamil Nadu Chief Minister M Karunanidhi. Most of the flyovers, new Secretariat complex were built by this man, who was also a distributor of Karunanidhi’s films. Star Health Insurance, owned by this man is running the state government’s group health insurance scheme. Sayed Salahuddin was also named in Justice Sarkaria Commission report in 1976. The commission was instituted by then prime minister Indira Gandhi, after dismissing Karunanidhi for gross corruption.
In November 2008 Subramanian Swamy shot a letter to prime minister Manmohan Singh seeking sanction for prosecution of A. Raja.
On 29 May 2009 (48 hours after Raja was sworn in again as telecom minister), Delhi High Court (Justice Mukul Mudgal and Justice Valmiki Mehta) on hearing the PIL against First-Come-First-Serve (FCFS) policy observed: “It is like selling cinema tickets. We find it very strange that public exchequer and valuable resources have been involved and misused in this way. We are completely astounded.”. The Delhi High Court in 1994 had termed the FCFS policy as barbarian and said not a suitable one to a democratic government.
On 1 July 2009 Justice G S Sistani of Delhi High Court quashed the DoT’s decision to reverse the cut-off date. The case was filed by STel. On 24 November 2009, Delhi High Court Chief Justice upheld the single bench verdict and rejected the appeal of DoT. Shockingly, in these two courts, DoT filed an affidavit that Raja got Prime Minister’s concurrence. How the Law Ministry and attorney general G E Vahanvati vetted such an affidavit? The affidavit filed by Telecom Department only says Raja’s letter to PM on 2 November 2007 seeking his consent for reversing the cut off date (last date of application). But the Telecom Department, minister Raja and the attorney general Vahanvati cleverly and criminally hushed up PM’s objections and directions to Raja on the same date.
This wrong affidavit was not included in the special leave petition (SLP) in the Supreme Court, when The Pioneer reported on misquoting PM in the Delhi High Court.
DoT approached Supreme Court through SLP to quash the HC verdicts. Janata Party president Subramanian Swamy impleaded himself in the case. Sensing danger, Raja wanted the STel to withdraw from the case. On 5 March 2010, Friday evening after office hours, DoT issued an order asking STel to close its operation in three states, citing security reasons. No show cause was issued to STel and later Home Ministry revealed that they never raised any sort of security concern. Arm twisted, STel surrendered before Raja on 8 March 2010 and declared that they have no troubles with DoT policy. Vahanvati produced STel’s surrender letter to the Supreme Court, which rejected it and directed the company to file an affidavit. Due to Subramanian Swamy’s presence, Raja’s design failed and court said that it will not interfere in the HC order declaring the change of cut off date as illegal.
It must be remembered that STel offered to DoT and later to prime minister Rs 17,752 crore (mentioned in the Para No: 11 of the verdict of Delhi HC Chief Justice) for pan-Indian licence/spectrum. But they got only three circles, due to change in cut-off date. Raja sold out Pan Indian licence/spectrum for just Rs 1,651 crore, the value fixed in 2001. The figure/rate quoted by STel in letters to DoT, Minister Raja and PM exposes the actual rates of 2G Spectrum in 2007-08 and huge loss to exchequer by Raja’s fraudulent action. This huge offer of STel became one of the basic factor for CAG in assessing the loss happened in 2G Spectrum allocation, including Dual Policy to Reliance and Tata.
The figure Rs 17,752 crore offered by STel, mentioned the judgments is typographical error. The actual figure is Rs 13,752 according to CAG, after verifying the DoT papers.
On 14 October 2009, Central Vigilance Commissioner Pratyush Sinha ordered the CBI to probe the spectrum scam under Sec 120B of IPC (criminal conspiracy) and Sec 13d of Prevention of Corruption Act. CBI registered FIR on 21 October 2009, which mentioned the loss was Rs 23,000 crore. Later Enforcement Directorate also registered cases. But nothing happened as DMK put pressure on Congress. How could CBI and ED act, when Raja was kept in power till November 2010? Then, the Supreme Court intervened in September 2010 on the public interest litigation filed by Prashant Bhushan, leading to the Supreme Court monitoring of the investigation.
By September 2010, the cases filed in the Supreme Court by Subramanian Swamy and Prashant Bhushan started in the Bench of Justice G S Sighvi and A K Ganguly. Thankfully, the mindset of the courts changed after S H Kapadia became the Chief Justice of India.
In November 2010, CAG tabled its report in Parliament finding a presumptive loss up to Rs 1.76 lakh crore due to the illegal allotment of 2G spectrum including Dual Policy.. Raja was finally forced to put in his papers on 14 November 2010.
The CAG found that out of the 122 licences, 85 licences were illegal according to the DoT guidelines itself, amounting to immediate cancellation at any point of time.
CAG found that the licences given to Swan (13), Unitech (22), Loop (21), Datacom (21) STel (6) and Allianz Infra (2) were totally illegal according to DoT guidelines itself, apart from violations in the Companies Act.
In December 2010 the Supreme Court started direct monitoring of the 2G scam case. It appointed investigating officers for the CBI, ED, established special court and special judge OP Saini. It appointed UU Lalit as special public prosecutor, the post Anand Grover was later appointed to in 2014 when Lalit retired.
In February 2012 the apex court cancelled all 122 2G licenses issued under the UPA. It ordered the government to follow auction route in future for all natural resources.
Five years later today (21 December 2017), judge OP Saini in his verdict has acquitted all the accused.
This post is sourced from senior Journalist J Gopikrishnan’s blogpost.