Telecom: Of That ‘2G Scam That Never Was’

The CBI Special Judge O.P. Saini is a magician. Vide his December 21 judgement, he made a clumsily executed scam like the Rs 1.76 lakh crore 2G spectrum scandal — which was executed in full public view by a government intoxicated with power and greed, meticulously documented by individual journalists, endorsed by statutory bodies like the CAG, upheld by none other than the Supreme Court of India in its historic 2012 verdict cancelling all 122 telecom licences — disappear.

In other words, all’s well that ends well. There was open loot, blatant robbing of the public exchequer and violation of policy. All the four pillars of democracy had lead roles, but now, the cops and robbers, heroes and villains game is over and it is time for a well-deserved New Year holiday.

Of course, it is hard to understand this surprise happy ending, because in 2011, the same Judge, in a 38-page order, had demolished the United Progressive Alliance (UPA) government’s Top three lies on 2G, since the scandal first broke in 2007.

TheUPA’s Top lie is that the Telecom Regulatory Authority of India (TRAI) did not recommend auctions for 2G spectrum and that the government not only followed the TRAI, but was duty-bound to do so.

Justice Saini’s 2011 verdict was that jailed ex-Telecom Minister A. Raja “deliberately and dishonestly did not consider auctions or revision of entry fee, and gave away licenses/spectrum at the same fee which were discovered in 2001, in a criminal conspiracy…”

 Raja was found guilty of criminal conspiracy along with senior officials of the DoT to commit criminal breach of trust, forgery, cheating, use of forged documents, payment/receipt of illegal gratification or valuable thing for a consideration known to be inadequate and criminal misconduct in the issuance of LoIs, UAS licences, and spectrum.

 UPA Lie Two is that Raja followed the First-Come-First-Served (FCFS) policy of 2003 announced by the NDA government. The CBI charges in 2011 concluded that far from following the 2003 FCFS policy, Raja, in conspiracy with government officials and private companies, “shuffled the priority from the date of application to the time of compliance of LoIs.”

Highlighting the contrasts between 2003 and 2008, Justice Saini’s earlier order emphasised that till Raja took over, “applications used to be processed in the order in which they were received”. It says that Raja entered into a criminal conspiracy which lasted till August-September 2009 “by manipulating the priority list on the basis of LoI compliances instead of the existing guidelines/practices of deciding applications on the basis of date of application subject to the availability of spectrum.”

Justice Saini noted in 2011 that beneficiary firms combined this advantage with “prior knowledge of such ill-conceived design of FCFS process and had been keeping the demand drafts ready since early November, 07 and October, 07 itself.”

Instead of following the 2003 policy, Raja deliberately deviated from it, even though it had been followed by the UPA till December 2006, which was the end of Dayanidhi Maran’s tenure as telecom minister. The order could not have been clearer about the sharp contrast between the policy of 2003 and the illegal actions of Raja and his co-conspirators in 2008.

UPA Lie 3 is that there were no windfall gains for Swan and Unitech, that the transactions only represented equity infusion into the companies for infrastructure rollout and did not result in any benefit to these companies or their promoters. Trashing this argument, Justice Saini at that time had concluded that the criminal conspiracy led to a total pecuniary (financial) benefit of Rs 7,105 crore to Swan and Unitech. He specifically quoted that this was a consequence of  “Swan and Unitech offloading their shares to the extent of 45 per cent and 60 per cent respectively for Rs 4,200 crore and Rs 6,100 crore to Etisalat Limited of UAE and Telenor of Norway respectively.”

While some may challenge the quantum of windfall gains and illegal gratification calculated by Justice Saini based on the CBI’s representation, this effectively puts to rest forever the argument that the Swan and Unitech transactions were merely equity infusions rather than windfall gains for the promoters. This was money that belonged to the nation and its citizens and according to the judgment, went into the pockets of conspiring individuals with the assistance of a carefully constructed conspiracy involving a series of illegal acts. Other charges showed up additional falsehoods and weaknesses in the government’s support of Raja.

The illegal advancement of the cut-off date was earlier in 2011, identified as a violation of the National Telecom Policy 1999 (Section 3.1.3) and the TRAI Act (Section 11), while manipulating the FCFS by setting up four counters to shuffle priorities and other transgressions have been established to be a part of a criminal conspiracy enacted to enable gains to private parties in exchange for gratification by depriving the nation of legitimate revenue.

In 2017, apart from a series of other concessions and let-offs, the same Judge “found no merit in the submission that the change of policy was manipulated by the accused and the accused beneficiary companies had prior knowledge of it …” In 2017, all 17 accused were acquitted by the same Judge, leaving India with ‘The 2G scam that never was’. Happy New Year!