Andimuthu Raja has chosen to brazen it out. But are his days as Communications and IT minister numbered? The Congress-led UPA today needs the support of the DMK less than it ever has since May 2004. After the CBI raids, there is no doubt that the spectrum scam, running into more than Rs 50,000 crore, is turning out to be an embarrassment for the government.
Raja says he consulted the PM and Pranab Mukherjee while allotting mobile phone licences with spectrum on a ‘first-come-first served’ (FCFS) basis—significantly, he does not categorically say they approved his decisions. Neither has Manmohan Singh really said he approved of what Raja did. The PM merely said allegations raised by the Opposition are not always correct and that he would not publicly discuss what transpired in cabinet meetings.
Raja also says the solicitor-general (now attorney-general), Goolam E. Vahanvati, approved his decision to bring forward the cutoff date to receive applications for licences. What he does not say is that the Delhi High Court has stayed this decision. Raja takes refuge in the National Telecom Policy of 1999, a cabinet decision of the Vajpayee government in 2003, and a single paragraph in a set of recommendations made by the regulator trai in 2007 that runs into 178 pages, to claim that he followed in the footsteps of his predecessors and the regulator’s guidelines. These are, at best, half-truths.
Successive documents put out by TRAI had recommended open auctions for allocation of scarce spectrum. The regulator’s suggestions have been cherry-picked and ignored to enable foreign companies to pick up equity stakes in Indian companies—conclusively (and ironically) establishing that each all-India licence that was given in January 2008 for Rs 1,651 crore (or prices determined in June 2001) had an actual market value that was six-seven times higher.
What Raja cannot justify is that two of the biggest beneficiaries of his decisions are real estate firms (Swan and Unitech) with no experience in telecom and which had close relations with him in his earlier avatar as Union minister of state of environment and forests.
On September 25, 2007, hours after Unitech put in 22 applications in the name of eight companies, the cutoff date was brought forward through an innocuous three-line press note. In three working days, 373 additional applications were received from local firms, not global players. Still, he chose not to accept new applications. Raja waited until D.S. Mathur, the then secretary, DoT, and Manju Madhavan, member, finance, Telecom Commission, (who had both resisted his moves) were out of the way—the former retired and the latter retired prematurely—and a new secretary, Siddharth Behura, was appointed on January 1, 2008, before letters of intent were issued.
Is it not true that the PMO engaged the DoT in November 2007 (as did the law ministry) calling for the establishment of an empowered group of ministers to award licences? And that Raja refused to oblige on the specious plea that only “procedures” had to be decided, not “policy issues”? Further, the then finance secretary, D. Subbarao (now rbi governor), wanted the DoT to stay its actions, but he too was ignored.
Raja’s claim that high spectrum prices would increase charges paid by consumers is not borne out by facts. Despite Vodafone paying $11 billion (nearly Rs 55,000 crore) for a 67 per cent controlling stake in Hutchison Essar in February 2007, telecom tariffs have crashed by nearly a third since then.
Raja cannot deny that on January 10, 2008, at 2.45 pm, an announcement was posted on the website of the DoT stating that letters of intent would be issued to companies between 3.30 pm and 4.30 pm after they paid huge application fees immediately by demand draft with supporting documentation. Nor can he deny that a mad melee ensued that afternoon in the corridors of Sanchar Bhavan—well-heeled CEOs were manhandled by bouncers hired by their business rivals before the cops turned up, late as usual.
Raja also knows that the central vigilance commissioner wrote to DoT secretary Behura on November 15, 2008, asking him “not to lose sight of the malfeasance and moral indifference in pursuing with the decision” to allot licences and spectrum on an fcfs basis to companies that subsequently sold their stakes at fancy prices to foreign firms. What is the PM waiting for? Will he call Raja’s bluff? Or will he continue to maintain silence over Raja’s claims that imply that the PM and some of his senior colleagues were accomplices in the biggest scandal in independent India?