Column: The flip flops of C Sivasankaran

Written by Rishi Raj | Updated: Jun 16 2011, 09:01am hrs
Serial entrepreneur C Sivasankaran has embarrassed the UPA government for the second time in a span of two years. In both instances, the ministers with egg on their faces happened to be from the DMKA Raja earlier and Dayanidhi Maran now. What will be interesting and, of course, worth watching is whether Siva (as he is popularly referred to) conclusively nails Maran over his allegations that Maran forced him to sell his mobile firm Aircel to Malaysias Maxis or reaches for a settlement as he did earlier with Raja.

To put it in perspective, the 2G heat on Raja reached its peak in November 2010, leading to his exit. But had Siva stuck on to his battle with Raja, the former minister would have met his fate much earlier, around March 2010. Those following the 2G spectrum mess from the start were a disappointed lot when Siva did a sudden volte-face just at a time when the screws were tightening on Raja.

For those not familiar with the nitty-gritties of telecom, Sivas firm STel is one of the nine companies that were granted licences by Raja in January 2008. However, Siva had a grievance. He could get licences for only three circles against his application for 22. This is because of Rajas arbitrary decision to advance the cutoff date for processing the applications received till September 25, 2007, against the earlier announced date of October 1, 2007.

Since the six applications were made before September 25 and the balance after that, STel could secure licences for only six circles. An incensed Siva moved the Delhi High Court in 2009, challenging Rajas move. The court, on July 1, 2009, ruled in Sivas favour and said that the advancement of the cutoff date by Raja was both illegal and arbitrary. The government appealed the matter before a division bench, but lost. On November 24, 2009, the bench upheld the order and, in spite of the presence of the attorney general Goolam Vahanvati, it ruled in Sivas favour. The matter was promptly appealed in the Supreme Court. Knowing fully well that Siva could succeed in the Supreme Court, in a sudden turn of events, he filed an affidavit withdrawing the matter from the court by giving an excuse that the market had changed and that he was no longer interested in more licences. It was unclear what was so compelling about the market in 2009 that pushed Siva to file the case, but became unattractive by March 2010! The Supreme Court slammed STel on its volte-face but did not nullify the high courts verdict; nevertheless, it sure came as a breather for the embattled Raja.

An interesting development took place days before the case was scheduled to come up in the Supreme Court. The department of telecommunications, in a sudden and unprecedented move, suspended the operations of STel in three circlesHimachal Pradesh, Bihar and Orissawhere it had started services till then. The one-line reason given was national security concerns. Once STel withdrew the case, the services were restoredthis is something that the CBI now plans to investigate. Its difficult to prove but, on face, some kind of deal with Raja at that point of time cannot be ruled out.

Theres another puzzling aspect of Siva. His company STel was amongst the first to file applications out of the list of 575 applications that came up for consideration for grant of licences. In the original lineup based on date of applications, only Idea, Spice and Swan were ahead of STel. Datacom and Unitech came far behind. However, when the spectrum allocation occurred based on the modified first-come first-served principle manipulated by Raja, Siva came third in line for spectrum in most circles and in others at the fourth or fifth position. In almost every circle, he let Datacom and Unitech jump ahead of him.

Not that Siva did not gain at Rajas hand despite the rejection of 16 applications. By getting the six licences at 2001 prices, he did make a major killing. Siva received licences for Assam, Bihar, Himachal Pradesh, Jammu & Kashmir, North East and Orissa at a mere R25 crore. The CAG report states: Out of the six, three companiesSwan, STel and Unitechwere new entrants in the telecom sector. The fact that these operators could draw huge foreign investments even before establishing a foothold in the Indian telecom market would suggest that acquiring a UAS licence and with it allotment of 4.4. MHz of GSM spectrum for rollout was the main factor which attracted the foreign investment.

This is because STel also sold 49% stake to Bahrains Batelco for $225 million. For the record, since 2006, Sivasankaran is a stakeholder in Tata groups Tata Teleservices. His initial stake was around 8%, which has subsequently come down to around 6%. In short, Siva has sold and bought more telecom licences in India than any other company or individual.

The charge he has levelled against Maran, who served as telecom minister from 2004 till April 2007 as documented in the Justice Patil report is that as telecom minister Maran delayed granting licences to Dishnet Wireless (Sivas company that merged with Aircel) in April 2004 on flimsy pretexts. The licences were, however, given within four months of Siva selling off Aircel to Malaysias Maxis group, whose associate company Astro subsequently made investments in Sun Direct, belonging to the Sun TV group, which is owned by Marans brother Kalanithi Maran. Maran has denied the charges. It is also true that there were several other irregularities committed during the Maran days in the telecom sector, which have been highlighted earlier in these columns. The Justice Patil committee has also documented them and the CBI is investigating them. But the most interesting thing to watch now is that, having made the allegations against Maran, will Siva help the agency in taking them to their logical conclusion or back mid-way as he did with Raja