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Updated: July 26, 2011 03:11 IST

Manmohan, Chidambaram aware of dilution of shares by Swan, Unitech: Raja

Jiby Kattakayam
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In this file photo A. Raja is being taken to the court by a CBI official. Mr. Raja says the decision of not auctioning spectrum was in continuity with the policy pursued by the NDA government. Photo: Ramesh Sharma
The Hindu
In this file photo A. Raja is being taken to the court by a CBI official. Mr. Raja says the decision of not auctioning spectrum was in continuity with the policy pursued by the NDA government. Photo: Ramesh Sharma

The former Telecom Minister, A. Raja, told a special CBI court here on Monday that Prime Minister Manmohan Singh and the former Finance Minister, P. Chidambaram, were aware of the dilution of equity through the foreign direct investment (FDI) route by two companies that were awarded 2G spectrum.

Commencing arguments on the charges levelled against him, Mr. Raja said he had worked in the “public interest” to provide mobile services at cheap rates and was only following the telecom policies established since 2001. He claimed that Mr. Chidambaram, when he was Finance Minister, informed the Prime Minister about foreign companies buying stakes in the two firms. The decision to award 2G licences at entry fees fixed in 2001, instead of going in for an auction was a Cabinet decision, he alleged.

“Etisalat buying a stake in Swan Telecom and Telenor buying a stake in Unitech Wireless was cleared by the Finance Minister in the presence of the Prime Minister. Otherwise, let the Prime Minister deny it,” said Sushil Kumar, counsel for Mr. Raja.

Mr. Kumar said Mr. Chidambaram told the Prime Minister that the “dilution of shares” by the now accused licensees to attract FDI was not illegal and did not amount to “sale of licence,” so Mr. Raja could not be accused of corruption in the spectrum allocation.

On why the pan-India entry fee for 2G licences was not revised from Rs.1,659 crore fixed in 2001, Mr. Raja pointed out that the former Telecom Minister, Arun Shourie, and his successor Dayanidhi Maran had awarded 2G licences at these same rates without going in for an auction. “I have implemented only what I have inherited,” he said. The Cabinet had decided to auction 3G licences while placing no such “obligation” on him to auction 2G licences.

Launching a spirited defence of himself and his fellow accused, Mr. Raja explained the government's policy to offer tele-services at low rates. “I have done the act in public interest to make mobile services cheap.”

When the court resumed proceedings after lunch, Mr. Kumar took exception to the reporting by news channels that his client had blamed Dr. Singh and Mr. Chidambaram. “I am not shifting the blame to the Prime Minister or the former Finance Minister. I am only defending my conduct in court.”

Mr. Kumar alleged that the CBI was making selective allegations against some persons while leaving out others. He asked why the CBI was not accusing other 2G licensees who sold stakes to foreign players, and other bureaucrats who were in the Telecom Ministry when controversial decisions were taken.

On the charge of criminal conspiracy, Mr. Kumar wondered how Mr. Raja could conspire with Shahid Balwa of Swan Telecom and Sanjay Chandra of Unitech Wireless when the two were “competitors” for spectrum in the same circles.

Counsel also took exception to the court insisting on beginning arguments on charge without completing investigations into the scam. Mr. Raja completed arguments on the criminal conspiracy and cheating charges against him. He is expected to begin arguments on the charges of “forgery” (Section 468 of the IPC) on Tuesday.

In our system of democratic governance, the cabinet under the chairmanship of the Prime Minister is the only authority which can approve policy decisions. Even the Prime Minister, let alone other Ministers, has to put up policy proposals before the cabinet for its consideration and approval. Only those who do not know this or the staunch supporters of the Prime Minister in the media and among the general public would have said that A.Raja had taken decisions on policies of his ministry and implemented these without cabinet approval. Truth however has to be told to the court. Raja's lawyer has done just that.

from:  K.Vijayakumar
Posted on: Jul 26, 2011 at 10:12 IST

From all that it is in public domain, it is necessary for the PM and the former FM, to resign and explain their role in the scam..

from:  G.Naryanaswamy
Posted on: Jul 26, 2011 at 08:19 IST

PM cannot be a spectator without commenting on his minister, when it is against public interest. His silence is not impressive. Either he has to defend his minister or accept mistake. People have put confidence on the Govt. Here he has to answer for People Dharma, Coalition/Corruption Dharma has no logic.

from:  PSR Murthy
Posted on: Jul 26, 2011 at 06:42 IST

The charge against the former Telecom Minister A Raja, is NOT only abuse of his official position in the deceitful allocation of 2G Spectrum @ a relatively low cost, but also includes amassing wealth to the tune of Rs.1400 crores. If his predecessor did follow some wrong policy, should A Raja too follow the same (wrong) policy. A Raja as Telecom Minister did commit some serious blunders during his tenure as TC Minister. Whatever his present stand may be, he deserves to be handled appropriately by the Law.

from:  Paddy
Posted on: Jul 26, 2011 at 05:59 IST

The CAG has stated in his report that there has been a loss of Rs.1,76,000 cr. to the government. Where has this money gone? We can only say that the people have been benefited by the reduction in call charges of telephones. The majority of firms, who have got the licenses for about Rs.1650 cr., have not gained any immediate benefit. They have to develop their business and get their profit from people, month after month. If they get huge profit, it will be taken care of by income tax. The growth of cell phones will definitely help the nation in increasing its GDP. If the government loses money by way of giving licenses cheaply, the nation and its people gain when the GDP rises consequent on big expansion of cell phones and low telephone call charges.

from:  Viswanathan M .
Posted on: Jul 26, 2011 at 02:27 IST

Dilution of shares is not illegal. The act of diluting shares to mask a pay off is. All share holders are aware of shares being diluted, so why is it a big deal if the PM knew about it?

from:  Anith
Posted on: Jul 26, 2011 at 02:20 IST

Taking moral responsibility for this the Prime minister of India, Dr.Manmohan Singh should resign. With the image of Mr.Clean and Mr.Progress, I was one of those average Indians who rejoiced on the election of Dr.Singh to the chair. Never in the past, I thought, India had a PM who possessed a sound resume as Dr.Singh. But soon his actions as the PM made me understand the fact that eductional qualification has got nothing to do with leading. The strange sort of immunity that he has developed towards issue of corruption and corrupt politicians in his cabinet, is something the posterity would mark as an important blunder in the history of Independent India. Never in past in the 61 year old republic, had corruption been more corrupting the Indian image than now.

from:  Divya Prasanna
Posted on: Jul 26, 2011 at 00:41 IST

I have strong objection to the argument Mr. Raja is giving on why he did not revised prices of PAN-India entry fee. We all including Govt. and CBI should know that market situation in 2001 under Mr. Shourie were different. In 2001 India was encouraging private investors to invest in Telecom TO BREAK STATE MONOPOLY and also no one could imagine the level of business that would bring. However market situation was changed dramatically within couple of years, and it was known to everybody amount of profit investors are can make in telecom, hence; the argument of not revising price is completely nonsense. This is exactly the same in oil business, when one applies for an exploration license the prices are very low (even discounted) but next day of discovery the price of the block are more than 1000%, just because there is known revenue potential. And I request somebody in media to open this subject for a debate.

from:  Jitender
Posted on: Jul 25, 2011 at 23:23 IST

Both Chidambaram and Manmohan Singh should voluntarily resign if they have got any shame and dignity left in them after revelations by former minister A RAJA.

from:  Rajan Vinayakamoorthy
Posted on: Jul 25, 2011 at 23:04 IST

I think, when it comes corruption, it does not matter who you are or which party you belong to.

from:  Sudhir
Posted on: Jul 25, 2011 at 22:57 IST
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