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Thursday, October 29, 2009

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FIR charges ‘unknown’ DoT officials with criminal conspiracy
Neena Vyas Share · print · T+ The Central Bureau of Investigation’s first information report on the telecom licence and spectrum scandal has charged “unknown officials” of the Department of Telecommunications with carrying out a “criminal conspiracy” to award licences “for a heavy consideration” by “putting a “cap on the number of applicants against the recommendations of the TRAI” (Telecom Regulatory Authority of India).

Filed on October 21, the FIR, a copy of which was made available to the press by political sources, also charged these officials as having awarded licences on a first-come, first-served basis on 2001 rates without any competitive bidding.

A specific charge is that the government suffered an estimated loss of Rs.22,000 crore. A case has been made of favouritism. On September 24, 2007, through a press release, the DoT stated no new applications for licences would be accepted after October 1, 2007. Between September 25, and October 1, 2007, a large number of applications were received, but none accepted.

On January 10, 2008, letters of intent were issued to nine service providers for 122 telecom circles on the basis of applications received by September 25, 2007, thus showing them “favour.”

This was later justified by the Department saying that the applications received first would be processed first, and if found eligible, be given licences.

Then again, according to the FIR, an “arbitrary condition” was imposed saying that licences will be issued first to those depositing the fees first. It noted that favour was shown to some applicants to whom this information was leaked in advance so that they could get the money together and deposit it before others.

Without any valid reason, applications received after September 25, 2007, were rejected and licences given to a “few selected companies at nominal rate” causing “wrongful loss to the government of India and a corresponding gain to private persons estimated to be more than Rs.22,000 crore,” the FIR stated.

Open and shut case, says Jaitley
Bharatiya Janata Party leader Arun Jaitley described the scandal as an “open and shut criminal case.” He charged the CBI with attempting to “dilute the scale of the scandal” from roughly Rs. 60,000 crore to Rs.22,000 crore.

He said it was simple arithmetic. Taking up the illustration mentioned by the CBI in the FIR: A company named Swan was allotted licences for 13 circles for Rs.1,537 crore. It offloaded 45 per cent of equity in this shell company to a United Arab Emirates based company Etisalat for Rs.4,200 crore. The CBI calculated the loss to the government by deducting Rs.1,537 crore from Rs.4,200 crore — Rs.2,663 crore, and has done a similar exercise for all nine licences.

However, Mr. Jaitley pointed out that since 45 per cent of the equity stake was sold for Rs.4,200 crore, it was a matter of simple arithmetic that 100 per cent equity was worth more than Rs.8,800 crore and the loss was to the tune of more than Rs.7,200 crore in this case alone.

“If you look at each of the figures for the nine licences, the total figure comes to more than Rs.60,000 crore with each licensee having made a clean profit of around Rs.7,000 crore,” Mr. Jaitley emphasised.

Keywords: spectrum scandal, telecom licence, Central Bureau of Investigation, Department of Telecommunications, TRAI, Telecom Regulatory Authority of India
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