September 27, 2020
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'A Cover-Up Operation'

It's a scam involving close to Rs 60,000 crores and the BJP is on the offensive: 'It is unfortunate that the Prime Minister has chosen to comment on the innocence of the minister even while the investigations are on'

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'A Cover-Up Operation'

The Central Bureau of Investigation has registered a regular case with regard to the allotment of spectrum for the 2-G license issued by the Department of Telecommunications in 2007. Offices of the Department of Telecommunications have been searched and various documents have been seized. Even when the investigations were going on and the accusing finger categorically points to the Telecommunication minister, A. Raja, the Prime Minister has today made a statement that the allegations against the Telecom minister A. Raja were not correct. He has further said that whatever the Opposition says is not always correct. To Shri A. Raja’s statement that he had kept the Prime Minister informed of what he was doing, the Prime Minister has said – “ I would not like to join issue in  public with my Cabinet colleague.” Obviously, the Prime Minister is in no position to agree or disagree.

The allegations against Shri A. Raja and the officers of the Department of Telecommunications are very clear. In 2007 an open license regime was recommended. Applications for telecom licenses were invited setting 1st October, 2007 as the deadline. The first allegation is that even when applications were invited till 1.10.2007, an artificial cut-off date i.e. 25.9.2007 was created and applications received between 25.9.2007 and 1.10.2007 were summarily rejected and not considered. Rules of the game were changed after the game had begun. All friendly applicants, mostly real estate companies had been advised to put in their applications on or before 25.9.2007. This is not the Opposition’s charge as the Prime Minister has commented. It is now a judgment of the Delhi High Court, which has quashed the fixation of these cut-off date wherein many experienced players were left out and 9 licenses were issued to relatively inexperienced parties. 

The next allegation relates to the amount to be charged for the licenses and the spectrum allocation from these 9 operators. The license is merely an entitlement to operate the service. The physical operation can commence only after the allotment of spectrum. Together, the two were allotted at a price of Rs. 1650 crores per operator. This price was taken not on the basis of the 2007 market value of the license but on the basis of an auction held in 2001which determined the 2001 price. Thus, a valuable public asset was being allotted in 2007 at a 2001 price. The minister’s contention that the TRAI had recommended this is wholly erroneous because the TRAI had recommended that “the entry fee determined in 2001 is not the realistic price for obtaining the license. Perhaps it needs to be re-assessed through a market mechanism.” In any case a government asset should ordinarily be sold through an auction. The value of the license and spectrum in 2007 could not be the same as in 2001. The telecom market has grown phenomenally during this period. Obviously, the government and the Public Exchequer suffered a loss. The quantum of loss suffered in this case is easily determinable. The allotees post allotment did not operate the service. All that they owned was a shell company and a guaranteed spectrum. They availed the 74% FDI policy of the government and found buyers/ joint venture partners from the international market. The companies were overnight valued at over 200 billion dollars (over Rs.9000 crores) and a large chunk of the equity was sold by at least 3 licensees to overseas partners at a price of Rs.6000- 7000 crores. If the value of spectrum in each case was over Rs.9000 crores, obviously the government lost over Rs. 7000 crores per each license. For the 9 licenses collectively along with the spectrum, the net evaluation exceeds Rs. 60,000 crores. 

This loss would be further compounded because the additional spectrum being made available in the market at a throw away price would suppress the value of the 3-G spectrum for which the government now plans an auction. If auction can be held for the 3-G spectrum in accordance with the decision of the EOGM why was the same principle was not followed while allotting the 2-G spectrum. 

The Bharatiya Janata Party had raised the issue in Parliament in the Monsoon Session. The Party had demanded that under section 13(1)(d) of the Prevention of Corruption Act, a public servant is said to have committed an offence of criminal misconduct if he by corrupt or illegal means gets for himself or any other person a valuable thing or a pecuniary advantage. This provision provides for a 7year imprisonment. It is clear that the crucial decisions in case were taken by the minister himself. The minister, Shri A. Raja is primarily liable for this offence. 

It is unfortunate that the Prime Minister has chosen to comment on the innocence of the minister even while the investigations are on. There was no occasion for the Prime Minister to send such a signal to the investigative agencies directly under him. The fact that the minister belongs to an alliance partner of the UPA could not be a ground for a cover-up operation. This country has been robbed of a large amount of money by this misdemeanour of the Telecom Department. The compulsions of the coalition politics should not come in the way of an honest investigation. Propriety requires that while the investigations are under way, the minister should cease to be in office. His continuation in that ministry is itself a deterrent to an honest and independent investigation. The entire Nation is closely watching this investigation. Let this investigation not result in holding civil servants guilty and the minister innocent. It was the minister who is the prime accused and the civil servants were only carrying out his dictates.


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