We are now hearing about the 2G Spectrum scam of more than Rs. 1.70 lakh crore, involving A. Raja, who till recently was the Union Telecom Minister. The scam exposed by the Comptroller and Auditor General of India (CAG), was mentioned back in 2009 itself in various media and political circles. Unfortunately, the Opposition at the Centre has woken up only now and is demanding a probe by the Joint Parliamentary Committee (JPC).

Star of Mysore had published an article about this scandal way back in October 2009 in its weekly column “In Black and White” by Vikram Muthanna, Managing Editor, under the title “Spectrum Spectacle”.

The article was written with inputs sourced from the book “Corruption and Corporate Governance in India” by former Union Minister Dr. Subramanian Swamy [who at that time, had single - handedly pursued this deep - rooted multi - crore scandal and still continues to pursue] with additional inputs from the Press Trust of India (PTI) reports.

The scam is so sinister in its dimension that even the Prime Minister Dr. Manmohan Singh, all along perceived to be the man above any iota of suspicion, has now come under the cloud of suspicion for maintaining a sphinx - like silence.

Since this unseemly “Spectrum Spectacle” is still before us, Star of Mysore is reproducing that article published on Oct. 24, 2009, which might interest our readers who may have missed it or by way of recall. The figures mentioned in the article were published in 2009 based on research material and sources available back then. Shockingly, in a year, the figures have increased seven - fold. Even more shocking is the continued indifference of the Union government.

— Editor

Union Telecom Minister A. Raja has been accused of wrongly allocating spectrum licence, but he says he has done everything in conformity with the government’s telecom policy. He, of course, has also denied his role in the nearly Rs. 22,000 crore telecom spectrum scam. Raja said “Licences were issued in accordance with the law. I have followed what my predecessors have done since 1993. I had no external pressure to deviate from the Law.”

Radio spectrum or spectrum on which the telecom operators send and receive signals contains only a limited number of frequencies. Signals can be sent on different frequencies all at the same time. However, as the number of frequencies is limited, they need to be allocated to different service providers.

Auction of spectrum is a major revenue source for the government. Indian telecom sectors’ net worth is estimated to be about $29 billion. Its contribution to India’s GDP has increased from 1.59 per cent in 2000 to over 4 per cent today. It was reported that Sitaram Yechury of the CPI (M) had written to the Prime Minister on 29. 02. 2008 warning the government about the impropriety of issuing licences at throw away prices. No wonder then that the two companies that were granted most of the spectrum, Swan Technologies and Unitech, for just Rs. 1537 crore and Rs. 1651 crore respectively, resold them for much, much more.

Swan Technologies, within a few weeks of getting the licence sold 45% shares to Etisalat, the UAE telecom company for Rs. 4500 crore and Unitech sold 60% shares to the Norwegian Company Telenor for Rs. 6120 crore. Subramanian Swamy in his write up “The spectrum fraud” states, “The spectrum fraud, the greatest since 1947, represents a swindle of Rs. 50,000 crore of public money. The Union Telecommunications Minister A. Raja is charged with having allotted 2G spectrum for mobile services on a “first – cum – first - served basis” rather than going for an open global auction.”

Subramanian Swamy also states that Swan Technologies is now in the process of investing Rs. 1000 crore by taking 49% share in a company operating in Chennai called Green House Promoters Pvt. Limited and on the Board of Directors of this company is none other than A. Raja’s wife M.A. Parameshwari Raja! The official address of this company is actually Raja’s official address # 2A, Mothilal Nehru Marg!

Raja said that he has only followed his predecessor, who happens to be none other than another DMK representative in Delhi Dayanidhi Maran. It seems Congress has given full control of the lucrative telecom industry to the DMK in exchange for their support. This literally means the Congress has moved to a whole new level in horse trading. The government has literally outsourced the Telecom Department to a single party in return for support.

While many in the Telecom Ministry say they did not follow a first – cum – first - served principle, the fact is that the DoT had adopted an “extremely sinister” method in eliminating competition while granting licence to a favoured few, according to Subramanian Swamy. It is said that the cut - off date for receiving application was set for 1st October, 2007 and this was announced on 24th September, 2007, 8 days before the deadline. Then suddenly the cut - off time was changed to 25th September, 2007.

Now the other issue is how come Unitech, a real estate company which had no experience in the telecom sector, got involved in the telecom business? But then we must remember that A. Raja was the Minister for Environment before he was transferred into DoT by his party; so he was obviously in contact with many real estate companies who would have contacted him for environmental clearances. It is reported that many of these real estate companies had in fact applied for spectrum share. It is obvious that these real estate companies realised that they did not have to be in the telecom industry to be players in the telecom sector. Just like how one does not have to be a builder to be in the real estate market. They realised that all they had to do was “manage” to get spectrum at a throw away price and then resell it to a real telecom operator, and that’s exactly what they did and the government was a party to this brokering activity.

The Prime Minister may say nothing about this matter yet but he cannot ignore it. He must question the fact as to how the spectrum bought could be resold in the market for nearly 8 times the original price paid to the government in just a matter of weeks? Why didn’t the government get the best rate, the market rate?

Is the Congress pampering its allies too much and giving them too much freedom to handle Ministries? Should the country lose over Rs. 22,000 crore just so Congress can stay in power? The Congress’ attitude has always been that of nonchalance when it comes to dealing with corruption.

As economist Arvind Lavakare noted, “A conspicuous example of the Congress’ keenness to protect corruption is seen in the text of “The Prevention of Corruption Act, 1988” which states that previous sanction by government is necessary for prosecution of the public servant suspected of corruption. But then let’s not forget when it comes to money, all the parties are the same. Each party might have a different agenda but when it comes to “fund raising” they are truly democratic. They protect each other. That is why no matter which party comes to power, it never has and never will take up corruption charges that they themselves levied against the previous party.”

The NDA did that with the Bofors Scam and the Congress did the same with Pramod Mahajan’s “SIM card” deal. While the politicians scratch each other’s back and continue on their fund raising spree, we remain mere spectators threatened to pay our taxes on time.

Sources:
1) "Corruption & Corporate Governance in India" by Subramanian Swami
2) Press Trust of India Reports

Vikram Muthanna
vikram@starofmysore.com
Courtesy: Star of Mysore