As the former Telecom Minister, A. Raja, his former Personal Secretary R.K. Chandolia and ex-Telecom Secretary Siddhartha Behura were ordered by a Delhi Court on Thursday to remain in the Central Bureau of Investigation (CBI) custody for five days, CBI officials appear set to sharpen their line of questioning to elicit more information on various aspects relating to alleged irregularities and the violation of guidelines in the grant of licences and the allocation of 2G spectrum in 2008.
The CBI has questioned the accused persons, asking them why the allotment of licences was done in a hasty and improper manner. Sources said the agency had been able to establish that terms and conditions were ignored in the grant of licences to telecom firms such as Swan Telecom and Unitech Ltd.
These firms later benefited to the tune of several hundred crores of rupees when they sold their stakes to various other global firms.
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Swan had offloaded its shares to UAE-based Etisalat, while Unitech offloaded its majority shares to Norway-based Telenor Telecom.
With the probe into the 2G spectrum scam having picked up steam only in the past two months after the Supreme Court turned the heat up on the CBI, the agency will now have to work overtime to tie up the loose ends. The sources said that Mr. Raja had been rather “evasive” on several aspects and that the CBI would need to establish that procedural guidelines were violated by the accused who abused their official position in the awarding of licences in 2008.
After taking charge as Minister of IT and Communications in May 2007, Mr. Raja wanted to grant licences as per the “first-come-first-served” method and continue with the old pricing of spectrum as decided in 2001. It was reportedly opposed by the then Telecom Secretary, D.S. Mathur, and Member (Finance) Manju Madhavan of the Department of Telecommunications (DoT).
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As brought out by the Comptroller and Auditor-General of India (CAG), the Telecom Minister first arbitrarily advanced the last date for submitting fresh applications in 2007 and later, selectively issued Letters of Intent to some applicants, thereby not following the first-come-first-served method in a fair and transparent manner.
For instance, Swan, which had submitted the application on March 2, 2007, was given the spectrum for the Delhi service area on August 28, 2008, while Spice Communications Ltd., which had submitted its application in August 2006, was not given the spectrum till March last.
Similarly, Reliance Communications was given “undue benefits” while approving dual/alternate use of technology and also awarded GSM spectrum in a hasty manner. These aspects would form a major part of the CBI's further probe.
On December 31, 2007, Mr. Mathur, who had refused to fall in line with Mr. Raja, retired, and the Minister brought in his trusted bureaucrat, Mr. Behura, who had worked with him as Additional Secretary in the Ministry of Environment and Forests, as new Telecom Secretary. Mr. Raja, Mr. Behura and Mr. Chandolia, formed the triumvirate and allegedly colluded amongst themselves, which led to the government exchequer incurring huge “presumptive” losses.
CBI sources said that records of telephone conversations had indicated that Mr. Raja's favoured company owners and brokers used to meet him at his residence and were aware of the Ministry's crucial decisions well in advance. The agency would also look to find out how kickbacks allegedly flowed from Swan to a newly floated company in Chennai in November 2008, and how the Tamil Nadu link may have indirectly benefited Mr. Raja.
According to the CAG report, 13 applicant companies which had applied for 123 Unified Access Services licences and were granted 85 licences, did not even have the requisite authorised share capital on the date of submission of the applications. The CBI's line of questioning would focus why such major shortcomings were overlooked. Clearly, the CBI detectives will have to burn the midnight oil, joining the dots, over the next few days.