Times 2

Raja, a king pinned

Has India got the most wanted man in the 2G scam? Or is he a mere cog in a more complex wheeling deal?
By Arindam Mukherjee

This is not the first reputation that has sunk or the last voice that has been shamed by the Niira Radia tapes. Far from it. But there is something quite central-and infinitely more charged with symbolism-about the arrest of former telecom minister A. Raja and a few of his associates by the Central Bureau of Investigation. It's a huge comedown for a beleaguered government that's spent the past three years trying to deny, ignore, paper over, even subvert, the true import of the 2G spectrum allocation scam. If the powers-that-be had had their way, A. Raja would still be the telecom minister of the UPA government.

The UPA's many attempts at "managing the environment" have been swept away by forces beyond its control. The public anger against corruption-the Adarsh Society scam or the Commonwealth Games, amongst others-has been too loud to ignore, and the Opposition parties have been intractable in their demand for a proper probe into the 2G scam. Moreover, Raja was arrested eight days before the CBI was required to submit its progress report in the Supreme Court, which is now the guardian of the 2G scam investigation. The government has been asked tough questions in the wake of two PILs filed by lawyer Prashant Bhushan and Janata Party chief Subramanian Swamy in the Supreme Court, challenging the government's 2008 2G telecom licence and spectrum allocation. It really had nowhere left to hide.

The fallen Raja being taken to court

It's here that the excerpts of Radia's taped phone conversations published by Outlook played an important role. Serious, as well as titillating, the conversations taped by the I-T department brought to life the key "movers and shakers" in the 2G scam. From the naked parleying with lobbyists and senior editors in cabinet formation to the internecine corporate wars of telecom companies and bureaucrats, it made it all the more difficult to hide behind voluminous action-taken reports and complex conversations on spectrum policy.

Although the CBI is yet to file a formal chargesheet (it has 60 days to do so), there is plenty going against Raja. Even so, given the current air of public distrust against the government's motives, many questions are being asked. Foremost among them is: is the arrest of A. Raja-and his former personal secretary R.K. Chandolia and former telecom secretary Siddharth Behura-an attempt to contain the extent of the scam to these individuals? On the face of it, Congress alliance partner DMK has been advised to wash its hands off Raja. But surely Raja would not have acted in isolation; will he, and other players, then start singing and reveal more links within the DMK and the Congress-led government? Will this go all the way to the top?

That depends on what the CBI has on Raja's role-and more-in the scam. To start with, the attack is on procedural grounds, as the current telecom minister Kapil Sibal had pointed out. The primary charge, of course, would be the giving away of licences at throwaway prices to favour some companies. Not only did Raja stick to a 2001 price of Rs 1,651 crore for licence and start-up spectrum given in 2008, he also refused to auction 2G spectrum and followed a first-come-first-served policy for grant of licences, something not clearly defined in any policy. Unravelling the bizarre play of ministerial power to manipulate policies in favour of a few companies should be relatively easy.

"Now the legality of all licences would be looked at," says independent Rajya Sabha member Rajeev Chandrasekhar. Insiders say that with Raja taken care of, the next round of action will be on the beneficiaries of the scam-companies that benefited from Raja's dubious tactics. This would be strengthened by the CAG report, which categorically declared that as many as 85 of the 122 licences were illegal. With the Supreme Court supervising the investigations, these companies will have no place to run if the illegalities are proven. They may stand to lose their licences or face stiff penalties.
According to sources in the telecom industry, the spotlight will be on companies named in the CAG report and whose holding pattern was questionable at the time of application.

These include Swan where, the CAG alleges, Reliance Communications had more than the permissible 10 per cent equity-which the company has denied. Others could be Loop, Datacom (now Videocon Mobile) and S-Tel, as well as older players like Idea-which applied for licence to some circles in 2006, and were part of the 2008 brigade.

At the same time, the CBI scanner will fall on companies through which Raja is said to have benefited. It is learnt that the I-T department has unearthed a money trail where a Mumbai real estate company paid a large sum of money to a Chennai-based company. According to reports, the department found some key linkages of this trail to the 2G scam. The Radia tapes also revealed transactions between a Tata group subsidiary and the DMK, as well as donation of equipment to a hospital in Raja's home town Perambalur. There are also references in the tapes to Raja's "interest" in Swan Telecom-and transactions with another licensee, Unitech.

Some in the telecom sector feel that cancellation of licences is doubtful in view of the "public good", as many of these companies have already rolled out services and have subscribers. But experts feel that if it is established requirements weren't fulfilled at the time of application, the apex court can order cancellation of licences, something the government would have to comply with. Says a senior official from a mobile company:

As expected, the mood in the telecom industry is one of fear, especially among the newer players. Some of them have already started trimming their workforces. With the Supreme Court itself sending notices to telecom companies last month, the matter is out of DoT's hands. Clearly, the government has lost the moral ground to command this investigation.

Only last month telecom minister Kapil Sibal challenged the CAG claim that the state exchequer lost Rs 1.76 lakh crore on account of 2G allocation, saying that the government actually lost nothing as the scam was nothing but a procedural irregularity. His theory found support in Planning Commission deputy chairman Montek Singh Ahluwalia, who went on to say that the companies who sold equity within months of obtaining a licence-Swan to Etisalat and Unitech to Telenor-had made no money as the proceeds of the equity sale were put in the company and used for business development.

Courtesy Outlook, India

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