Congress using the low bid amt of Rs 9,407/ crs to discredit the CAG and challenge the loss fig of Rs 1.76 lakh crs. 

Key points -

1. To read about what happened on Jan 10 2008 when certain companies were favored read this super art by Bhupesh Bhandari. Can Congress deny these facts? http://www.businessstandard.com/india/news/all-inday/s-work/464311/

2. As art below points out, There were no bidders for Mumbai, Delhi, Karnataka circles. If these nos are kept aside, total govt earnings were 67.9 % of the total base price not bad. Base price for 3 circles were high since based on 3G auction prices. 

3. Companies have probably become smarter, realised their balance-sheets are bleeding to 3G spectrum fees, so bid carefully. No mad rush.

4. It is in the interest of Telecom cos to close the 2G scam issue since most companies stand exposed. A cynical view is that they formed a cartel, bid low to prove the CAG loss figure wrong and help UPA as well.

5. Key is to wait for Supreme Court observations on auction and what Govt will do with partial spectrum blocks not sold and imp 3 key circles where no one has bid.
Telecom saga far from over!

Has the 2G spectrum auction really been a failure? http://www.business-standard.com/taketwo/news/has2g-spectrum-auction-really-beenfailure/492707/

Deconstructing the numbers shows companies have bid smartly to get the best deals

Surajeet Das Gupta / New Delhi November 16, 2012, 0:54 IST

The recently concluded sale of 1,800-MHz spectrum through auction to telecom service operators, or telcos, has been declared a damp squib for two reasons: One, only five telcos participated in the auction; and two, the bids added up to Rs 9,407 crore, which was less than a third of the Rs 30,000 crore the government had thought it would collect.

The numbers look even more appalling when analysed in some detail. The government has been able to sell less than 20 per cent of the Rs 48,000 crore of spectrum (GSM and CDMA combined) it had put up for bids. The CDMA auction failed totally because there were no takers. Even if you ignore that failure, the numbers don’t look attractive: In the 1,800-MHz band, the government has been able to get only 27 per cent of the base price. Telcos blame the government for misreading the market and keeping the base price too high for anyone to be interested.

Yet, scratch the surface and the story begins to look different. If the overall revenues that the government has been able to garner were poor and interest in the auction from operators looked lacklustre, it was because of just three telecom circles where there were no bidders – Delhi, Mumbai and Karnataka – of the 22 the country is divided into. (Rajasthan didn’t see any bidding, too, but that could be a different story.) That happened because the base prices of these circles were unusually high. The reason for that is simple: The base price for the current round of auction was benchmarked on the prices discovered during the auction of spectrum for third-generation, or 3G, services in 2010. Competition for these circles in that auction was stiff because telcos rightly assumed that data traffic would be heavy here. That is why the base price became very high in these three hot circles in the latest auction. The three circles together constituted as much as 48 per cent of the total base price of Rs 14,000 crore for pan-Indian spectrum of 5 MHz. Since these circles went unbid, the entire auction looked like a disaster. If these three circles are kept aside, the total earnings of the government do not look so bad: The collections are 67.9 per cent of the total base price — not really a failure.
So far as fewer bidders are concerned, especially when compared to 2008, when there was a literal stampede for spectrum, it is worth noting that this time around, five telcos were in the fray, even though the spectrum was almost ten times more expensive than in 2008. And that it hasn’t got the government what it had hoped for doesn’t mean the initiative has flopped. “There is no requirement anywhere that all the spectrum available needs to be sold at whatever price. Spectrum is valuable and it can be auctioned again with the same base price and operators must get used to paying a premium, ” says a former office-bearer of the Telecom Regulatory Authority of India.

Telcos, battling low tariffs (phone calls in India are among the cheapest in the world), shrinking profits and massive debts, have naturally argued that the base price in these three circles was out of sync with the demand or the situation on the ground. Rajan Mathews, the director-general of the Cellular Operators’ Association of India, or COAI, the lobby group, says: “There is a need to recalibrate the price in these circles which was kept so high compared to their revenue potential that no one saw any value in even bidding for those.” Operators argue, for instance, that the base price for Tamil Nadu was kept at Rs 306.09 crore, while it accounts for 8.75 per cent share of the overall telecom revenue. At the same time, Delhi, with 8.41 per cent of the revenue, was priced higher at Rs 694 crore, and Mumbai, with 7.1 per cent of the revenue, had a base price of Rs 678 crore.

Picking and choosing
Operators have bid smartly in the auction: They have gone for many circles that have been reasonably priced and account for a healthy share of the country’s telecom revenue. One case is that of Vodafone, which has picked up additional spectrum in as many as 14 circles. A senior executive of the company says: “We have bid and won additional spectrum in circles where the base price has been reasonable and where the market is growing, for which we would require more spectrum”. So, while Vodafone has won spectrum in circles which constitute 44.67 per cent of the total telecom revenue, the value of these circles is only 22.85 per cent of the total base price (for pan-Indian spectrum). This makes these circles an attractive target.

Interestingly, the top-five circles in terms of the number of blocks sold (seven to 11) — Bihar, UP (west), UP (east), Gujarat and West Bengal — are also attractive in terms of the price- value equation. While together they contribute over 24 per cent of the total telecom revenue, their share of the base price is nearly half, at 13.6 per cent.

Telenor has cleverly decided not to bid for the expensive Mumbai circle, apart from Kolkata and West Bengal, even though it currently has subscribers in these circles. That is because if it had done so, it would have had to pay a staggering 51.96 per cent of the total base price to get into circles which have 50.06 per cent of the overall telecom revenue. That would have been unwise. What Telenor has done instead is to bid for circles which constitute 37.17 per cent of the telecom revenue, but whose share in the total base price is 28.5 per cent. Idea Cellular just stuck to the circles which it had lost due to the Supreme Court order cancelling all licences handed out in 2008 (under the first-come, first-served policy) when Andimuthu Raja was the telecom minister. Videocon was cashing in on the fact that its outgo in the auction would be neutralised by the Rs 1,658 crore that will get adjusted under the auction policy. The government has agreed to adjust the money that the operators paid for the cancelled licences. Videocon has forked out Rs 2,221 crore in the latest auction, which effectively means all it has to give the government is Rs 733 crore upfront and the rest in instalments spread over 10 years. However, Venugopal Dhoot, the chairman of the Videocon group, says his company has to pay nothing now as this would be set off against the licence fee it had paid earlier .


WHAT THE GOVERNMENT GETS
Based on the reserve price for GSM, the govt could have earned a maximum of Rs 34,385 crore
Real earning for the govt is Rs 9,407.6 crore, 27.4 per cent of the total reserve price

Delhi, Mumbai and Karnataka circles, which account for 48 per cent of the base price, did not receive any bids

If the government had not put the Delhi, Mumbai and Karnataka circles up for auction, its total earnings would have been 67.9 per cent of the reserve price for the 18 circles being auctioned

The government aims to get about Rs 31,000 crore from one-time fee charge

If the payment by operators is staggered, the government will get only Rs 9,300 crore this financial year 

The target could fall further if the cash-starved BSNL and MTNL are unable to pay Rs 11,000 crore of the one-time payment. If that happens and if operators decide to stagger payment then the govt would get only Rs 6,000 crore 

If everyone pays the auction fee through a staggered payment, the govt will get Rs 2,822 crore 

Also, the govt's share might become even smaller if it has to adjust licence fee payment of those operators which faced cancellation. However, there is no clarity on who would be eligible
High estimates
The other question is whether the government has misread the market by expecting too much money from the telecom sector. The reality is that when Pranab Mukherjee, then finance minister, now President, had announced in this year’s Union Budget that the government would raise Rs 40,000 crore (the target was later lowered to Rs 30,000 crore) from spectrum auction, he, as well as the government, was perhaps unaware that three things could happen: One, the deferred payment scheme, whereby bidders need to pay only a third of the money upfront; two, state-owned BSNL and MTNL making it clear that they do not have any money to pay Rs 11,000 crore as one-time fee to the government for excess spectrum; and three, after the Supreme Court verdict, it would have to provide credit for companies that lost spectrum. If there was no instalment scheme, the cash from the auction and the one-time fee (to be paid by operators who have spectrum beyond 4.4 MHz in GSM and 2.5 MHz in CDMA) would have been enough for the government to meet its original target of Rs 40,000 crore. That includes Rs 31,000 crore from one-time fee as cleared by the government. The numbers, however, have changed dramatically because of the three new elements that have come into the picture.

However, despite the new challenges, most experts assume that bidders will go for a staggered payment scheme rather than paying upfront, even though it means paying annual interest of 9.75 per cent for 10 years. But, the reality could be different and many might find it easier to raise funds overseas at a much cheaper rate and pay upfront. Vodafone, for instance, has publicly opposed the staggered payment scheme. If that happens, the revenue numbers could change in favour of the government.

There is some talk that those who lost their licences after the Supreme Court verdict will get credit for their sunk investment only if there are no criminal cases against them in court. Though such companies insist there is no such rule, COAI’s Mathews says: “It’s a tricky issue whether those who have charges would get the benefit or not.”

What is, however, clear is now for the government to take the next steps – what to do with the partial spectrum blocks in many circles that have not been sold and, more importantly, what to do with the three key circles where no one has bid. Can it reduce the base price without the move being challenged in a court of law? Over to the government.

Dec. 18, 2012

Dear Shalini Singh ji,

Congrats for the remarkable scoop. http://www.thehindu.com/news/national/former-cab-secs-letter-gave-pm-option-to-hike-2g-price-stop-scam/article4210504.ece?homepage=true

It is a pity you have chosen not to publish a photocopy of the full letter. It is so important to get to the truth and reaffirm your credibility that the letter copy should be published in full so that there is no hide-and-seek game among the agencies 'investigating' the nation's 2G scam.

Methinks, media owes this to the nation.

Best wishes, Dr. S. Kalyanaraman

2G: Ex-Cabinet Secy’s letter shows PM failed to stop scam
by R Jagannathan 52 mins ago Dec. 18, 2012

He may have recently reclaimed the title of born-again reformer, but the image of Manmohan Singh as the man who wrung his hands in despair while A Raja robbed his treasury refuses to go away. In fact, it has come back looking truer than ever.

As early as September last year, Firstpost documented how both the PM and Finance Minister P Chidambaram could have stopped Raja from issuing telecom licences and spectrum at 2001 prices if they had wanted to. Even though Raja announced the issue of licences on 10 January 2008, it was not till the end of February that the actual letters of intent were issued. The PM and the FM had time to act, but didn’t.

Now there is more evidence that Raja’s actions could not have taken the PM by surprise, but that he actually failed to act on warnings from his senior-most officials. AFP

Now there is more evidence that Raja’s actions could not have taken the PM by surprise, but that he actually failed to act on warnings from his senior-most officials.

Early this October, former Cabinet Secretary KM Chandrashekhar told the Joint Parliamentary Committee (JPC) probing the 2G spectrum scam that he had warned Manmohan Singh that if Raja’s spectrum prices were not revised due to higher demand and inflation, the exchequer would lose Rs 35,000 crore.

A report in The Hindu today gives us further details about how the PM failed to do his duty by ignoring his Cabinet Secretary’s advice.

According to Chandrashekhar’s calculations, the real value of a pan-India 2G licence with 4.4 Mhz of in-built spectrum should be Rs 8,700 crore and not the Rs 1,658 crore decided by Raja. This figure of Rs 8,700 crore for 4.4 Mhz compares quite well with the price of Rs 14,000 crore for 5 Mhz fixed for this year’s auction – i.e. nearly four-and-a-half years later – which was widely deemed a flop. By purley inflation-indexing Chandrashekhar’s figure, the 2012-end price could be close to Rs 14,000 crore.

The newspaper reports that Chandrashekhar’s letter to the PM was written on 4 December 2007 – more than a month before Raja gave his licences. He wrote that prices need to be indexed to increase spectrum fees. His reasoning? “All asset prices have increased substantially over the last six years, with inflation being about 34 percent. In the case of spectrum, the quantum allocated has increased by around 40 percent over this period, while teledensity has become 5-1/2 times. On this basis, the value of Rs 1,650 crore paid in 2001 becomes (1,650 x 1.34 x 5-1/2 divided by 1.4) = Rs 8,700 crore, ie, about Rs 7,000 crore higher”.

The revenue loss figure of Rs 35,000 crore mentioned by Chandrashekhar came from the fact that there was enough spectrum to give licences to at least five new operators (with an initial 4.4 Mhz each). Thus the Rs 7,000 crore loss on each licence with spectrum would work out to Rs 35,000 crore for five licensees.

Chandrashekhar’s letter is damaging not only to the PM’s credibility, but the Congress party’s repeated claim that there was no loss from Raja’s decisions. After the recent auctions drew few bidders, Communications Minister Kapil Sibal, P Chidambaram and I&B Minister Manish Tewari were quick to attack the Comptroller and Auditor General (CAG) for his own higher loss calculations. “Where the Rs 1.76 lakh crore, Mr CAG?” they asked in unison.

Firstpost has already explained that the Rs 1.76 lakh crore “presumptive loss” was only one of the four potential loss estimates given by CAG Vinod Rai. To this, Chandrashekar adds his own loss estimates of Rs 35,000 crore.

Clearly, the PM and the government knew there would be a potential revenue loss, but they continued to pretend there was no loss by acquiescing with Raja’s nefarious plan.

Chandrashekhar’s letter, quoted in The Hindu, rubs it in better than even the CAG. He wrote to the PM: “The fact that the market considers this asset under-priced (can be seen) by the long queue for fresh licences, the alacrity with which Reliance and two other firms paid up the fee when allowed to do so (within a few hours). SingTel has, as per media reports, made an offer of Rs 5,000 crore for the licence (bundled with the initial 4.4 Mhz spectrum), while Mr Ratan Tata offered in 2005 to pay Rs 5,000 crore for 5 Mhz (3G) spectrum”.

The CAG was working on the right track, even though the actual loss would depend on market conditions.

Chandrashekhar’s letter proves that everyone who had anything to do with the 2G spectrum auction doesn’t have a figleaf left to cover themselves with.

http://www.firstpost.com/business/2g-ex-cabinet-secys-letter-shows-pm-failed-to-stop-scam-561254.html

NEW DELHI, February 18, 2013
More skeletons tumble out of leaked 2G call transcripts

SHALINI SINGH

CBI prosecutor in touch with second accused Balwa; CBI cherry-picks from CAG’s list of ineligible applicants

New evidence suggests that the CBI’s 2G prosecution case could be even more severely compromised. Detailed call transcripts of a conversation, allegedly between the CBI’s prosecutor A.K. Singh and the key accused, Unitech Managing Director, Sanjay Chandra, reveal that the prosecutor was additionally in discussion with a second key accused Shahid Balwa of Swan Telecom.

Private TV channel CNN-IBN, which had exclusive access to some parts of the conversation, had telecast the contents on February 12.

An analysis of the Call Transcription in the Preliminary Enquiry (PE) no. 1(A) 13/AC-III/ New Delhi now shows that prosecutor Singh, by his own admission, had been in communication with Mr. Balwa either directly or through a third party. Mr. Singh further cited judgments favouring the accused, obliquely suggesting that these should be used by defence counsel to destroy the prosecution’s case.

An investigative story by The Hindu ‘Right under Supreme Court’s nose, conspiracy hatched to destroy 2G case’ published on February 13, 2012, had shown that DoT officials named in the tapes — B.B. Singh, then DDG Licence Fee, and A.K. Srivastav, then DDG Access Services — had a crucial exchange three days before the 2G scam, which was perpetrated on January 7, 2008.

Mr. B.B. Singh had alerted Mr. Srivastav that the paid-up capital required for a pan-India licence was Rs. 138 crore and not Rs. 10 crore. Despite 85 licensees becoming ineligible on this account, Mr. Srivastav processed their applications, enabling them to fraudulently access LoIs and later, spectrum.

These revelations throw up previously unknown acts of omission and commission of individuals in positions of authority — both within and outside the CBI — who have systematically been compromising the CBI case. This evidence additionally calls for a review of some government witnesses/approvers, since the full call transcripts reveal that they may have committed illegal acts, independent of ex-Telecom Minister A. Raja, his Personal Secretary R.K. Chandolia and the then Telecom Secretary S. Behura — so far, the only three accused from the Telecom Ministry.

It now turns out that CBI prosecutor Singh, who admits to being in regular dialogue with Mr. Balwa, was worried that the latter following a different legal strategy could damage his own attempts to help out Mr. Chandra and possibly others as well.

While discussing the case, Mr. Singh allegedly told Mr. Chandra (Hindi to English translation of call transcription): “Balwa is damaging the trial. God give him wisdom. He is preparing a noose around his neck and also damaging others alongside... don’t know… Have explained to him a thousand times…”

Chandra: “He has improved in comparison to the past...”

Singh: “Don’t know what is the problem, can’t fathom. I… don’t know, what he thinks of himself? …a little… has to be told…”

Despite Mr. Chandra’s assurance that Mr. Balwa had improved, Mr. Singh remained unconvinced and sceptical.

There is good reason for Mr. Singh and Mr. Chandra to worry about Mr. Balwa. The 63-page CBI charge sheet, dated April 2, 2011, co-accuses Unitech (Chandra) and Swan (Balwa), under each of the five charges relating to “(A) Investigation about Cut-off date, (B) Investigation into violation of First-Come-First-Served Policy, (C) Dual Technology Approvals and Spectrum Allocation, (D) Eligibility of Companies, and (E) Cheating the Government Exchequer by Non-Revision of Entry Fee.” Most of the charges are identical, though Mr. Chandra is an accused under Section 420 of the IPC, while Mr. Balwa is accused of offences punishable under Sections 420, 468 and 471 of the IPC.

Another part of the call transcript, which has not been aired in its entirety so far, relates to the favourable judgments that Mr. Singh is citing which, according to him, if used after securing the testimony of the government’s star witness, Mr. Srivastav, will not only overrule all other government witnesses but will eventually destroy the case altogether.

(Hindi to English translation of call transcription):

A.K. Singh: “Yes…Srivastav will state that Sir, for DoT, the approval of the shareholders is mandatory before the application…. and that…. its prima facie a company.”

Chandra: “That’s all?”

Singh: “After looking, this is what he will state…”

Chandra: “Rao sahib can get our work done. There is no problem…”

Singh: “Kambuj is a third person. His findings are not binding on DoT. For that, I have a brilliant judgment. Unlikely anyone else has that judgment, which states that the Department that formulates a guideline can interpret it in 10 different ways. Whatever is DoT’s understanding is being testified by their own witness and in future that alone will be sustainable. I dealt with a typical issue… In U.P., let me tell you… even though it’s extremely unfortunate that the entire defence counsel has not been able to cite this judgment. It’s an interesting judgment about petrol pumps of Indian Oil… in which…”

Mr. Singh assures Mr. Chandra, later in the same conversation, that he needn’t worry about Mr. Srivastav’s testimony since on the issue of eligibility, Mr. Srivastav would deliver an unabashed statement to help Mr. Chandra’s case.

The transcription further throws up a new character called “Rao sahib” who Mr. Chandra believes will assist in delivering government witness Srivastav’s testimony to dilute the case against Mr. Chandra.

These revelations, including that Mr. Singh is encouraging the defence lawyers to cite judgments against the prosecution while additionally assuring the accused of a favourable testimony from the prosecution’s star witness, show the extent to which the rot has set in the prosecution’s case, which is being heard daily in a special CBI court.

The last piece of evidence emerging from the Singh-Chandra exchange is on how to get past the eligibility accusation faced by Unitech in which Mr. Chandra feared an adverse testimony by Mr. Kambuj who prepared the RoC report. Investigation by The Hindu shows that Unitech, according to the CAG, had violated eligibility criteria across six different guidelines in each of its 22 applications. Altogether, the CAG pointed to 85 licences being in violation of the eligibility conditions (see chart on Page 1).

The Supreme Court’s order of December 16, 2010, invoking the CAG report, had expressly directed the CBI to investigate how ineligible companies received LoIs/licences, including the role of DoT officials in granting such licences. This was especially significant since out of 232 qualifying applications on the cut-off date of September 25, 2007, 110 were found ineligible by the same officials who allowed 85 faulty applications through the door.

Yet, the CBI charge sheet restricts its observations to Swan and Unitech, while ignoring the eligibility violations by Loop, Alliance, Videocon and S Tel, all of which, according to the CAG, were guilty of accessing spectrum fraudulently. The CBI charge sheet also makes no mention of guilty officials, who have all been converted into witnesses. It is unclear whether the officials who selectively processed ineligible applications did so independently or under directions from Mr. Raja.

This new evidence reveals that despite filing status reports through the CVC and being under the Supreme Court’s supervision, the prosecution’s case has been extensively damaged by the CBI’s weak charge sheets, aided by a team of compromised prosecutors and witnesses.

http://www.thehindu.com/news/national/more-skeletons-tumble-out-of-leaked-2g-call-transcripts/article4425555.ece?homepage=true

NEW DELHI, February 13, 2013
Under Supreme Court’s nose, conspiracy hatched to destroy 2G case

SHALINI SINGH

Tapes suggest prosecutor, accused and star witness colluded to vitiate SC directions to CBI

The exposure of an apparent conspiracy between the CBI prosecutor in the 2G scam investigation, A.K. Singh, and the accused Unitech Managing Director, Sanjay Chandra, could have grave consequences since it reveals a deliberate attempt to pull the wool over the Supreme Court’s eyes under whose supervision the entire investigation and prosecution has been occurring since December 16, 2010.

The leaked conversation leads the matter beyond the prosecutor and accused to involve star prosecution witness A.K. Srivastav, who was otherwise liable to face a jail term, along with the former Telecom Minister, A. Raja, the former DoT Secretary, S. Behura, and the former private secretary to Mr Raja, R.K. Chandolia.

The recordings suggest that Mr. Singh was colluding to help Mr. Chandra by not only discussing the CBI’s legal strategy but in fact overruling internal instructions on what questions to ask, pre-deciding their sequence to suit the accused and on whether to call B.B. Singh, DDG (Licence Fee) of the DoT’s Finance Division, for cross-questioning, versus A.K. Srivastav, DDG (Access Services). It is clear from the taped conversation that Mr. Singh and Mr. Chandra believe that using Mr. Srivastav’s testimony would help destroy the prosecution’s own case in three stages, including one that relates to Unitech obtaining licences and spectrum in spite of being ineligible.

The CAG, in its report of December 16, 2010, stated that 85 of the 122 licences granted to 13 companies by the DoT were ineligible. For Unitech, it detailed in pages 35-41, the manner in which the company had provided “false” and “fictitious” certificates on authorised share capital and misrepresented facts. The CAG said: “Their conditional registration by the ROC was a fraudulent act of these 6 companies with mala fide intention of obtaining the UAS licences for 20 service areas by misleading DoT.”

Slamming DoT officials as well, the CAG wrote: “It would thus appear that the DoT miserably failed to do the necessary due diligence in the examination of the applications of these applicants though they took more than 3-9 months to process these applications as against a prescribed period of 30 days.” It was Mr. Srivastav and his team which, while rejecting roughly 100 applications, certified these applications for grant of LoIs, overriding internal written warnings of the finance division on page 28 N of File No: 20-100/2007-AS-I.

SC direction vitiated

The Supreme Court, after hearing the PIL, which had forced the CBI to finally act in November 2010, leading to the arrest of Mr. Raja in February 2011, had specifically directed the CBI to investigate the issue of “ineligible applicants,” who fraudulently accessed licences.

The court, taking cognizance of the CAG report, also directed investigation against DoT officials involved in grant of licences to ineligible firms. It said: “The CBI shall conduct a thorough investigation into various issues highlighted in the report of the CVC which was forwarded to Director, CBI, vide letter dated 12-10-2009 and in the report of the CAG who have prima facie found serious irregularities in the grant of licences to 122 applicants, majority of whom are said to be ineligible, the blatant violation of terms and conditions of licence and huge loss to public exchequer running into several thousand crores. CBI should also probe how new licences were granted to large number of ineligible applicants and who was responsible for the same and why the TRAI and DoT did not take action against those licensees who sold their stake/equities for many thousand crores and also those who failed to fulfil rollout obligations and comply with other conditions of licence.”

This meant that the CBI should have indicted Mr. Srivastav and members of the AS cell. However, instead, the CBI turned him into the star government witness, closely mirroring an approver. The conspiracy of the quid pro quo, uncovered by the tapes, reveals that the testimony of the government witness was to be used to acquit a key accused with the help of a complicit prosecutor — who was focussed on what he would get paid if he was representing the corporates instead of the government. Mr. Chandra’s acquittal of charges of obtaining licences on ineligible applications would have collapsed the case while additionally exonerating DoT officials of charges of collusion.

CBI-Srivastav-Chandra collude

An investigation into the case files by The Hindu shows that Mr. Srivastav had bypassed written warnings by Mr. B. B. Singh, DDG (LF), whose name also appears in the tapes, that “accordingly all service areas licence equity required is Rs.138 crores and not ten crores as per the UASL guidelines 2005.” On January 7, 2008, Mr. Srivastav, ignoring this noting and the knowledge that several companies, especially Unitech, did not meet the criteria on the date of application i.e. September 24, 2007 (as was later disclosed by CAG), processed the file leading to grant of 122 LoIs, which included 22 granted to Unitech’s eight different companies. (See table).

The CAG, which discovered the fraud, said of Unitech in its December 16, 2010 audit report: “Eight applicants belonging to Unitech Group (Brand name Uninor) had been incorporated in August-September 2007 with an authorised share capital of 5 lakh each. All these eight companies passed the special resolutions for increase in the authorised share capital between 2 PM to 5 PM on 20 September 2007 in the extra-ordinary general meetings of the respective companies and deposited the requisite stamp duties on 3 October 2007 for increase in the authorised share capital. After they submitted the requisite applications along with the proof of payment of stamp duties on 5 October 2007, the certificate of the registration of the increase in the authorised share capital was issued by the ROC only on 8/11 October 2007. Thus the claim of the higher paid up capital of these companies on the date of submission i.e. 24 September and the supporting certificates of the company secretaries of these companies submitted along with their applications was false and fictitious.” The conspiracy was hatched to avoid prosecution of Mr. Chandra and DoT officials relating to this paragraph read with the SC directions of December 2010.

The conspiracy

In effect, an independent investigation and prosecution should have been launched against Mr. Srivastav and his officers. However, the CBI instead converted him into a prosecution witness. The CBI prosecutor is now using that favour to have him give statements which, according to Mr.A.K. Singh, is the only one that “will matter.” So despite contrary reports by officers of ROC (the leaked tape mentions one Mr. Kambuj), the case was to be destroyed using Mr. Srivastav’s testimony. Mr. Singh even cited a Supreme Court judgement to buttress this case in the alleged tele-conversation with Mr. Chandra.

The apparent conspiracy as recorded on tape appears to be an attempt to circumvent explicit directions of the Supreme Court, since the main accused within the DoT — Mr. Srivastav — has not been charged for processing 85 ineligible applications — including 22 of Unitech. And now, according to the tapes, the prosecutor, the prosecution witness and the accused are doing one another favours to deliver weak, pre-planned and favourable testimonies to dilute and eventually collapse the case which helps all parties, and most of all the government whose reputation is at stake. Since converting Mr. Srivastav into a prosecution witness rather than keeping him as a key accused remains within the discretionary powers of the CBI, it becomes clear as to why prosecutor Mr. Singh and the accused Mr. Chandra have such confidence in the favourable testimony of Mr. Srivastav in this sensitive case.



http://www.thehindu.com/news/national/under-supreme-courts-nose-conspiracy-hatched-to-destroy-2g-case/article4408402.ece