Defending Prime Minister Manmohan Singh and his Cabinet colleague P. Chidambaram, Communications and IT Minister Kapil Sibal on Monday said any “submission by an accused before a court at the time of framing of charges cannot be construed as evidence.”
Mr. Sibal was referring to his predecessor A. Raja's defence in the 2G spectrum scam where he said both Dr. Singh and the then Finance Minister, Mr. Chidambaram (now Home Minister), were aware of the sale of equity by two telecom licensees Swan and Unitech.
“In any case, this issue has nothing to do either with the grant of licences or the pricing of spectrum,” Mr. Sibal said, reiterating that the case against Mr. Raja was not regarding the framing of policy but its implementation. Attacking the Bharatiya Janata Party for demanding resignations of the Prime Minister and Mr. Chidambaram, the Minister said they had nothing to do with the 2G spectrum allocation issue.
“It is well known that at the time when the licences were granted, the first-come, first-served policy of the NDA government of 2003 was in place. The irregularities, if any, are with reference to the implementation of the first-come, first-served policy. That is the basis of the charge sheet which has been filed by the CBI against the prospective accused,” he pointed out.
Referring to the allegations regarding sale of equity in Swan and Unitech, both embroiled in the scam, Mr. Sibal said what occurred was “not sale of the equity but issuance of additional equity.” In October 2007, Swan issued additional equity to DB Infra and in February 2008 issued additional equity to Etisalat. The additional equity issued to Etisalat was less than 49 per cent, and hence entitled to automatic route as per existing FDI policy.
Similarly, in the case of Unitech, the additional equity issued to Norway's Telenor was given the Foreign Investment Promotion Board (FIPB) approval in August 2009. It was also cleared by the Cabinet Committee of Economic Affairs (CCEA) on October 19, 2009. “It is clarified that in both these cases what occurred was dilution of equity and not the sale of equity. Therefore, the expression ‘sale of equity' used by Mr. Raja is not appropriate … in both these cases what occurred was dilution of equity and not the sale of equity.”
Mr. Sibal further pointed out that the infusion of additional equity was the accepted policy framework approved by the BJP-led NDA government, in spite of the then prevailing lock-in period of five years during which the licensee could not transfer the licence.
Even the lock-in period of five years was done away with in 2003 by the NDA government. This means that the licencee could transfer and sell his licence to a third party without restriction, immediately upon the grant of licence, he added.
“On July 23, 2009 the UPA government introduced a three-year lock-in period. However, it did not prevent the licensee company or holding company to seek infusion of additional equity by third parties. This was done both in the case of Swan and Unitech. The Finance Ministry was of the opinion that neither of these cases involved any divestment but dilution of equity. Hence the transactions were legal,” he added.
