New Delhi:
A Raja spent all day today presenting his side of the telecom story that landed him in Tihar Jail. Mr Raja brought the Prime Minister and P Chidambaram into his line of defence. He also said that he deserves to be rewarded for following the rules.
Mr Raja was arrested in February for granting mobile network licences and second-generation (2G) spectrum at throwaway prices to companies who were not eligible. Two of those companies - Unitech Wireless and Swan Telecom - were able to leverage their licences to attract huge investment from foreign partners. Telenor jumped into bed with Unitech, and Etisalat tied up with Swan. "Where is the crime? Where is the conspiracy?" asked Mr Raja today. "Telenor buying a stake in Unitech Wireless and Etisalat buying a stake in DB Realty was totally legal as per the corporate law. The Finance Minister approved the sale in the presence of the PM. Let the Prime Minister deny it." He added, "What the telecom companies do after I give them spectrum is not my domain."
The legality of the deals has not been challenged by the CBI, which is investigating the scam - a fact reinforced by Telecom Minister Kapil Sibal today. He said that Unitech and Swan were entitled to create an infusion of equity and that profiting from this deal was not illegal. Mr Sibal also said that Mr Raja's claim that the PM was aware of both deals is correct. He stressed that neither company sold the actual licence. And that both companies were being investigated for favouritism and not equity infusion.
The government and the PM have said in the past that it's not the policy but Mr Raja's twisted implementation that saw companies like Unitech and Swan allegedly jumping to the head of the queue to get licences out of turn.
The fact that the companies were able to make several thousand crores on the basis of their licences has been used as an indicator of how much money the government lost by giving away those same licences so cheaply. For example, Unitech Wireless and Swan bought their licenses for about 1600 crores. Within months, Telenor paid 6000 crores for about 70 per cent equity. Swan was paid about 4500 crores by Etisalat for 45 per cent equity.
Mr Raja clarified in court that both Indian firms - who were real estate players - diluted equity by issuing new shares to their foreign partners. Mr Chidambaram, who was then Finance Minister, made the same point later. He said that after seeing media reports on the sale of spectrum, the Prime Minister asked Mr Chidambaram to look into the matter. Mr Chidambaram said he then asked Mr Raja whether the foreign investment was added through a dilution of shares or divestment. Mr Raja assured him that it was not spectrum that was being sold to the foreign companies.
Mr Raja has been questioned about why he decided against auctioning spectrum instead of awarding licences on a first-come-first-serve basis. "If the policy pursued by me was wrong, then all former Telecom Ministers since 1993 should also be jail with me," said Mr Raja. "If I had auctioned spectrum, that would have been a crime, as it was a Union Cabinet decision," he said. The government and the PM have said in the past that it's not the policy but Mr Raja's twisted implementation that saw companies like Unitech and DB Realty allegedly jumping to the head of the queue to get licences out of turn.
Like his party, the DMK, Mr Raja has stressed that he followed the policies introduced by his predecessors in the NDA government that was in power till 2004, when the UPA coalition was elected. Mr Raja said, "As Telecom Minster Arun Shourie distributed 26 licences while Dayanidhi Maran distributed 25 and I (Raja) distributed 122 licences. Numbers make no difference, however, it is to be noted that none of them auctioned the spectrum. If they had done no wrong, why am I being questioned? Let them deny that they have not done what I did. I was just following the 2003 Cabinet decision that is not to auction 2G spectrum. If I am following the law, I am not liable to be prosecuted. In fact, I should be rewarded."
CHIDAMBARAM ON SWAN, UNITECHMr Chidambaram told PTI that there was no sale of spectrum by Unitech and Swan Telecom to foreign partners; instead, they were issued fresh shares by promoters. And that this was discussed in the presence of Prime Minister Manmohan Singh.
(Read: Shares divested or diluted was the only issue discussed, says Chidambaram)If an investor buys existing shares off the owner of a company, the money goes directly to the owner. If fresh shares are issued for the investor, the money is pumped into the company. But in this case too, the owner of the company benefits because the value of the company shoots up, in turn increasing the value of the shares held by the owner.
BJP DEMANDS RESIGNATIONS OF PM, CHIDAMBARAMThe Bharatiya Janata Party (BJP) today demanded the resignations of Prime Minister Manmohan Singh and then finance minister P. Chidambaram after allegations by former communications minister A Raja that both knew about transactions in the 2G spectrum allocation. (
Read: BJP targeting ministers to retaliate for right-wing terror probe, says Chidambaram)
"Today, Raja has made it clear in the court that all the transactions in the 2G case were cleared after permission was given by prime minister and Chidambaram," BJP president Nitin Gadkari told reporters in New Delhi.
"Sonia Gandhi (Congress chief) always claims that action will be taken against those found corrupt... then why silence on this matter? I want to ask Sonia Gandhi whether Raja's confession in the court is direct evidence of the prime minister and Chidambaram's involvement (in the scam).
"I demand their resignation as they (prime minister and Chidamabaram) have no right (to continue)," he said. (
Watch: Gadkari's statement on PM 'outlandish', says Kapil Sibal)