Following is the press statement issued by Shri Kapil Sibal, the Union Minister for Communications and Information Technology and HRD here today.
Media reports have reported that the former Telecom Minister Shri A. Raja, in his submissions before the Special Court, has stated that the sale of equity in Swan and Unitech was to the knowledge of the then Finance Minister and the Prime Minister.
At the outset, submission by an accused before a court at the time of framing of charges cannot be construed as evidence. In any case, this issue has nothing to do either with the grant of licenses or the pricing of spectrum.
As far as the alleged sale in Swan and Unitech are concerned it is clarified that what occurred was not sale of the equity but issuance of additional equity.
On October 18, 2007 M/s Swan issued additional equity to M/s DB Infra and on February 17, 2008 issued additional equity to M/s Etisalat. The additional equity issued to Etisalat was less than 49%, and hence entitled to Automatic route as per existing FDI Policy.
In the case of M/s Unitech the additional equity issued to M/s Telenor was given FIPB approval in on August 21, 2009. It was also cleared by the 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 Shri A. Raja is not appropriate as explained above.
To clarify further, it may be stated that infusion of additional equity was the accepted policy framework approved by the NDA Government, in spite of the then prevailing lock-in period of 5 years during which the licensee could not transfer the license. Even the lock in period of 5 years was done way with in 2003 by the NDA Government. This means that the licensee could transfer and sell his license to a third party without restriction, immediately upon the grant of license.
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.
It is well known that at the time when the licenses were granted, the First-cum-First Served (FCFS) policy of the NDA Government of 2003 was in place. The irregularities if any are with reference to the implementation of the First-cum-First Served policy. That is the basis of the chargesheet which has been filed by the CBI against the prospective accused. As the matter is currently in court and is sub-judice, it would not be appropriate to comment on the merits of the above transactions
Also See, from the archives: Manmohah-Raja Letters