Column : It's not about Raja anymore

Written by Sunil Jain | Updated: Sep 21 2010, 04:11am hrs
PM Manmohan Singh has managed to stay reasonably clear of the 2G mobile licence allocations scandal in January 2008 by arguing it was telecom minister A Raja who was in charge, that Raja had told him he was only following existing government policy and that, if the CBI found anything, the guilty would be punished. The Supreme Court has asked Raja to explain why 9 companies were given licences in 120 telecom circles (each state is, broadly, a circle) at bargain-basement rateson January 10, 2008, Raja gave out licences at rates that were exactly the same as those paid by companies way back in the 2001 auctions. Even rough calculations show this was an under-pricing of around Rs 50,000-60,000 crore. The problem for PM, however, is that the CBI, which he controls, has also been sent a notice asking it to explain its progress. After all, the CBI filed its FIR almost a year ago, on October 21, 2009. How long does it take to wrap up a case thats so straightforward

Raja has sought to muddy the waters, and sadly even the PM has bought it (or hasnt he), by talking of existing government policy and of a first-come first-served allotment policythis is relevant for those who follow the minutiae of telecom policy, but you dont need it to establish the ministrys, and therefore Rajas, complicity. You just need to see Rajas own press releases to figure out the manipulation. The point is a simple one: it takes 5 minutes (basically as long as it takes you to read this piece) to establish what happened, the CBI has all the papers on who signed what and, in case it still doesnt get it, the CAG office sent a query to Raja way back in March this year (http://www.financialexpress. com/news/cag-finds-slew-of-violations-by-raja-in-telecom-licence-awards/604859) with such detail that even a blind man would find it difficult not to figure it out. Or is justice literally blind

To begin with, just remember that under the law, the Trai is the only body authorised to make recommendations in respect of telecom licences. Once it makes these recommendations, the government can accept them. If it doesnt, it is mandated by law to ask the Trai to reconsider them; if the Trai doesnt change its mind, the government is then free to go ahead. So, on August 28, 2007, the Trai made recommendations on whether new firms should be given licencesit said yes, there should be no cap on the number of players, accordingly a press release was put out in the newspapers on September 24, 2007, saying applications would be accepted till October 1, 2007. The Trai also said that, presumably since the firms were getting the licences at dirt-cheap rates, none of them should be allowed to indulge in M&A till they had rolled out their networks across the country. Remember this is the time when the likes of Bharti and Vodafone were desperately short of spectrum, which is why you keep experiencing call drops and poor quality reception on your phone. Clear so far

So, what does the telecom ministry do after that For one, on October 19, 2007, even before the first licence is given out (remember that happened only on January 10, 2008), the ministry issues a press release changing the norms. No, it didnt go back to the Trai. It simply said while no proposal for permission for merger shall be entertained till the rollout obligation is met; however, request for permission for acquisition may be entertained. What that means is an existing player like Bharti or Vodafone buying out these firms would be a merger but a new firm, like a Telenor of Norway or an Etisalat of Dubai, buying them out would be an acquisition. So thats manipulation number one.

On January 10, 2008, the government issued another press release, which could be called manipulation number twonotice that theres nothing about existing government policy or first-come first-served or stuff like that so far. The new press release said of the (575) applications that had been received for licences, only those received before September 25, 2007 (232) would be processed! Just like that, with one stroke of the pen, 343 applications were simply thrown out of the window. Surely, even the CBI doesnt require one year to figure this out But in case it does, Justice GS Sistani of the Delhi high court simplified matters for it. In response to a case filed by one of the firms that lost out (STel), he ruled on July 1, 2009, that while the government said it had accepted the Trais recommendation that there would be no cap, the September 25 cut-off date was in fact a cap. On November 24, 2009, when the government challenged this, the Delhi high court chief justice and Justice Muralidhar dismissed it on the same grounds. Given the court verdicts, this is an aspect of the investigation the CBI doesnt even have to prove. Note that theres been no mention of existing policy or first-come first-served policy so far!

It gets a bit confusing now, but not much. On the fateful January 10, 2008, the ministry issued two press releases. One at 1:47 pm on the September 25 cut-off dateit turns out, the CAG tells us after looking at the records, which the CBI now has, that the cut-off decision was taken way back on November 2, 2007 (more on the date later). The second said all interested firms should congregate in the ministrys office at 3:30 pm to know what happened to their applicationsthis was uploaded on the Web site at 2:45 pm! Nows the cute part where the so-called first-come first-served policy comes in. Those who knew when exactly the window was going to be opened were the first to bring in their draftsSwan Telecom paid the money for the Delhi and Mumbai circles at 4:11 pm and for the others at 6:25 pmand the ministry arbitrarily decided the first person to make payments (as opposed to the dates on which the applications were made) would be the first to get the licence.

What part of this doesnt the CBI get Its no longer about Raja, its about the CBIon November 2, 2007, the day Raja cleared the cutoff date, the PM wrote to him saying it was best to auction the licences or at least raise the entry fees since the current ones were based on the 2001 auctions. The manipulation is established and the CBI knows who signed what and at whose request. What, or who, is it waiting for

sunil.jain@expressindia.com