“Revenues from the 3G auction cannot be used as a reference for 2G”
A review of the statements made by former auditor-turned-critic R.P. Singh on the extent of losses from the 2010 sale of 2G spectrum reveals striking similarities with what A. Raja — the former Telecom Minister now facing trial on charges of corruption for his role in the 2G scam — has been saying to support his view that the CAG estimate of losses was inflated.
In his internal letter of May 31, 2010, recent television interviews as well as in a November 14, 2011 deposition before the Joint Parliamentary Committee, Mr. Singh has used many of Mr. Raja’s assertions, such as arguing that 2G spectrum is not comparable with 3G and therefore the 3G auction price cannot be used as a reference for 2G. Further, that the Swan and Unitech transactions were mere equity infusions under the FDI rules, had Finance Ministry approval and therefore did not result in any gains for the promoters or corresponding loss for the government. All of these arguments made by Mr. Raja have been rejected by the Supreme Court in its two orders of December 2010, first placing the CBI’s 2G investigation under its supervision and later cancelling 122 2G licences in February this year.
Mr. Singh has stated that he omitted the loss figures of Rs. 65,275 crore (based on the S Tel offer to buy spectrum at a higher price) as the offer had been withdrawn in the High Court and Rs. 1,02,497 crore (based on the comparison of 2G with 3G auctions) from a report submitted by field officers of his department, since in his view, as he wrote in his May 31, 2010 letter to the Director General (RC), CAG, that “Charging for 2G spectrum for rollout was never recommended by TRAI or the government never contemplated any charges for spectrum other than entry fee.”
This is exactly what Mr. Raja told the Prime Minister vide his letter No. 20-100/2007-AS.I of November 2, 2007, while refusing to either auction or index the spectrum pricing in spite of the PM’s letter of the same day, advising him to consider this. Mr. Raja said in section 3 of his letter, “The issue of auction of spectrum was considered by TRAI and the Telecom Commission and was not recommended.”
Earlier the same day, Mr. Raja had told the PM in another letter, “Now the department has decided to continue with the existing policy of first-come-first-served for processing applications received up to 25 September 2007.” These were his official refusal to auction spectrum citing both TRAI and DoT.
Later, as a defendant, Mr. Raja placed the same argument in the DoT’s counter affidavit in the SC dated November 11, 2010 in SLP No. 24873 of 2010 — 5 days before the CAG report — wherein the arguments that Mr. Singh used in his internal notes and more recently on his TV appearances were presented in paragraphs 74-77.
Mr. Singh has been using Mr. Raja’s arguments to attack the Rs. 1.76 lakh crore loss figure. While admitting to the JPC that he was no expert on telecoms, neither an engineer by training, Mr. Singh went on to give a detailed distinction between 2G and 3G spectrum to Rajya Sabha TV on Friday, which bears striking similarity to paragraphs 74-75 of Mr. Raja’s and the DoT’s defence in the Apex Court.
A year ago, while opposing the S Tel-related loss figure of Rs. 65,725 crore before the JPC, Mr. Singh repeated the same arguments made by Mr. Raja in the November 2010 affidavit. To the JPC, he cited the DoT reply to the CAG’s audit enquiry to support his view.
So much so, that even the mistakes in Mr. Singh’s testimony about the S Tel offer having been withdrawn in the High Court rather than the Supreme Court is bodily lifted from Mr. Raja’s defence in court.
Finally, Mr. Raja’s rejection of loss figures attributed to the Swan and Unitech transactions has also been repeated by Mr. Singh in the JPC and TV interviews by literally paraphrasing Mr. Raja’s press release of November 7, 2008 and paras 65-73 of the DoT’s November 10, 2010 affidavit in the SC. In effect, Mr. Singh’s opposition to the CAG’s loss figures uses the defence of the very Minister and department that he was required to audit.
Keywords: 2G spectrum scam, 2G scam, CAG loss estimate, inflated figures, R.P. Singh allegation, A. Raja, JPC, political scandals, UPA scams, 2G licences, Supreme Court directive, cancellation of licences