Prime Minister Manmohan Singh Ananda Krishnan in real trouble with its image dented by scams, pledged to take corruption head on and promised to punish the guilty,

watch http://www.ndtv.com/common/videos/embedPlayer.php?id=200315&autoplay=0&pWidth=418&pHeight=385&category=embedThe Indian Central Bureau of Investigation is looking into alleged discrepancies in the ownership change in Aircel by Ananda Krishnan’s Maxis Communications.. with its image dented by scams, the Congress-led UPA government on Sunday night pledged to take corruption head on and promised to punish the guilty, demonstrating through actions and not not words what it meant. Presenting the UPA’s report card on completion of two years in the second term, Prime MinisterManmohan Singh and UPA chairperson Sonia Gandhi gave an assurance that the government would prevent scams in future and reduce discretionary and arbitrary use of powers by public officials.

In her brief remarks in “Government of the UPA: Report to the People 2010-11”, Gandhi said, “We will take the issue of corruption head on and demonstrate, through actions, and not words, that we mean what we say.”Singh and Gandhi presented the report at a function at the Prime Minister’s residence and attended by leaders of coalition partners and outside supporters like Samajwadi Party and RJD.DMK, sulking in the wake of poll debacle and the arrest of its MP Kanimozhi, made a token presence with the attendance of its parliamentary party chief T R Baalu. None of its six ministers was present.

With his government reeling under attack over several scams in the last many months, Singh said, “there is the challenge of good governance and the need for political stability.

“In the past several months, a conjunction of several developments relating to 2G spectrum allocation, procurement and contracting issues related to the Commonwealth Games, and similar issues in state governments have brought public focus on the issue of corruption in public life.”

The Prime Minister said these developments have caused many concerned citizens to worry about the state of governance and the “pervasiveness of corruption”.

“These are legitimate concerns and the UPA government is determined to take corrective action. The due processes of law are already in motion. We are taking steps to prevent such developments in future and reduce discretionary and arbitrary use of power by public officials,” Singh said.

Speaking on the occasion, Gandhi said much has been said about corruption.

“Transparency, accountability and probity are at the very heart of our governance, our actions and we demonstrate this,” the UPA Chairperson said.

At the same time, she took a veiled dig at BJP for not removing Karnataka chief minister over corruption charges, she said, “It is unfortunate that some opposition parties do not share the same high standards of probity when it comes to their own.”

The 74-page report presented the achievements in various fields like economy, agriculture, rural development, education and healthcare.

Both Singh and Gandhi said the UPA government was committed to high economic growth that will be inclusive and containing inflation.

Any surprise at a connection being drawn between the 2G chargesheet and Anna Hazare’s fast over the Lokpal Bill is perhaps unwarranted. Anna Hazare’s main contention is that the 42-year-old pending Lokpal Bill should be drafted with inputs from civil society through a joint committee so that the anti-corruption body has teeth and can independently monitor corruption in government. This points to the absence of any truly independent, empowered agency in the country to tackle corruption.

The CBI’s latest chargesheet in the 2G scam investigation, which has been filed under the supervision of the Supreme Court, amply illustrates this. Timid and short on detail, the CBI chargesheet serves more as a lesson for students of law and police academies on how not to make a chargesheet.

For starters, the chargesheet goes out of its way to offer a clean chit to the Prime Minister (4 pages), the attorney general (2 pages) and the Tatas (7 pages). It appears the CBI believes its brief is to defend these three as the accused rather than focusing on its real job of detailing criminal conspiracy, delivering evidence on corruption and filing charges, without favour or prejudice, against those in the government and the private sector who cheated the exchequer.

The 60-page final report does not have a single line to prove corruption nor does it even remotely mention the evidence. Even on Kalaignar TV, it states: “Further investigation regarding these transactions, including custodial interrogation of the accused persons is in progress.” So there you are – a chargesheet on corruption after dragging its feet for 2 years and then being rapped on its knuckles by the Supeme Court — without a single piece of evidence anywhere. One should not rule out the influence of the coming Tamil Nadu elections on the flavour and deliberate shortcomings of this first chargesheet.

Since it is not keen on fulfilling its own mandate of a statutory investigating agency, the CBI has assumed the role of an auditor instead. This is an important move, which helps create a mid-point of Rs 30,984.55 crore between the CAG’s Rs 1.76 lakh crore revenue loss figure, which is accurately based on TRAI recommendations equating 2G spectrum with 3G spectrum, and telecom minister Kapil Sibal’s irreverent and indeed outright frivolous “zero loss” premise.

To do this, the CBI has invented a terminology called “Aggregate Gross Revenue (AGR) per MHz per Year” that has never been used before by anybody — DoT, finance ministry, TRAI or CAG. By citing some documents which are not in the public domain, the CBI takes a parameter used for measuring spectrum charge (recurring quarterly payment by cellular operators) to determine that the auction price for the entry fee would have been Rs 30,984.55 crore. Unsurprisingly, the CBI has failed to provide detailed calculations in support of its new loss figure. The CBI is way out of line in following Sibal’s lead in second guessing the CAG by using this oblique and ineffective parameter.

The CBI has further defied the Supreme Court Order of 16.12.2010 which instructed it to investigate spectrum auctions between 2001 and 2006 and the grant of UAS licences. The CBI has walked over that entire period as if nothing happened – ignoring the Justice Shivraj Patil OMC Report and the multiple statements and evidence provided by the government about the illegal issuance of new UAS licences since 2004 in violation of TRAI’s recommendations and the Cabinet decision of 2003.

None of the companies that were found ineligible in the CAG Report (85 of them) except Unitech have been chargesheeted. After so long, only Unitech’s 22 applications have been evaluated but not the other 63. The same officers who let in Unitech probably let in the others. Yet those officers who let in Unitech are not mentioned in the chargesheet.

The chargesheet also fights to clear attorney general Vahanvati’s name despite  the fact that it was he who personally approved the press release of 10.01.2008 which led to the 2G scam. The AG later suggested that the release was tampered with after he had approved it. However, file notings reveal that notwthithstanding the tampering in the last paragraph, the AG approved every decision that went on to become the bedrock of the 2G scam – illegal advancement of the cutoff date, violation of the TRAI Act while modifying the no-cap recommendations and manipulation of first-come-first-served (FCFS).

The CBI has carefully picked on some junior company officials as the prime accused. Is it the CBI’s case that these officials acted without the consent of the owners and promoters? If so, under whose authorization, and with what motive would this be? The CBI repeats the charge of criminal conspiracy between DoT, Swan and Unitech roughly 17 times in the 60 pages but doesn’t provide any insight into how, where and for what consideration such conspiracy occurred. Raja has been provided an exit route to blame his decision on solicitor general (now attorney general) Vahanvati’s advice, while giving the solicitor general an exit by saying that the file was tampered with. This is a perfect situation for the CBI court to dismiss the case against Raja with a little scolding, “The CBI failed to make out the case properly.”

The CBI has also completely failed to show any violation of Government of India (Transaction of Business) Rules – which would have helped nail the illegality, thus proving that the arbitrary decisions were taken for a consideration. If there was no illegal act and the money trail is missing (chargesheet has neither), how will the allegations against Raja, Chandolia and Behura be proved?

So apart from wasting 18 months of the taxpayer’s money since it first  filed its FIR in October 2009, it is clear that the CBI, despite the Supreme Court’s supervision, is up to serious mischief. It has accused three obvious government officials (Raja, RK Chandolia and S Behura) and a handful of junior nondescript private company executives with little or no evidence and in fact, left strategic loopholes for this case to either linger endlessly or be dismissed. Unless the CBI springs a surprise in its subsequent chargesheets or the Supreme Court comes down heavily on the CBI for putting together an April Fool’s Day (April 2, 2011) chargesheet, it seems that the stage is set to take the nation for yet another ride by pretending to run a case but in fact, subverting the process of justice by using a shallow and unsubstantiated chargesheet.

Anna Hazare’s agitation is timely, appropriate and critical. The CBI making a joke of the 2G scam investigation despite the Supreme Court’s best efforts shows how desperately India needs anti-corruption laws and institutions like the Lokpal to bring in the changes that Hazare and others in civil society seek. This is not to say that the civil society draft is perfect or that even civil society can control corruption with a magic wand and without accountability to other institutions. Regardless, the frustration and anger that one sees on the streets is because India has witnessed too much compromise on corruption for far too long.

Prime Minister Manmohan Singh’s defence in the 2G spectrum scam is fluctuating from nervous to plain weak. He insisted in Parliament last week that the finance and telecom ministries had concurred that auctions need not be held for determining the entry fee for startup 2G spectrum in 2008. Singh offered the same explanation at his media interaction on February 16.

The PM is using this “concurrence” as a critical argument to establish that he had rock solid reasons for standing aside while then telecom minister A Raja gave away precious spectrum in 2008 at 2001 prices — causing a staggering Rs 1.76 lakh crore loss to the public purse.

These remarks are sure to become the foundation for all inquiry by the JPC which will examine all procedural improprieties in the 2G scam under its terms of reference.

To begin with, why is the finance ministry’s concurrence any justification for a white-collar crime of this magnitude? At best, this only proves more firmly what everyone has suspected all along, that Raja wasn’t alone.

However, Singh’s argument, apart from being misguided and an own-goal (by implicating a Cabinet colleague), fails scrutiny yet again. There is as yet no information available in the public domain that can substantiate the PM’s claim that the finance ministry was consulted by the DoT and that “the two ministries concurred” before news broke of the 2G spectrum scam on January 10, 2008.

Ironically, after initially admitting in Parliament a difference of opinion between the finance and telecom ministries, the PM later said the two ministries agreed.

The finance minister wrote to the PM on January 15, 2008. According to the PM, later on, the two ministries “worked out an agreed formula on spectrum charges, which was then communicated to me on July 4, 2008”.

Then finance minister P Chidambaram’s letter of January 15, 2008, which is now being offered as evidence of concurrence, was written five days after the LoIs were awarded and refers to issues other than auction of entry fee for startup 2G spectrum. In Section 9 of his letter, Chidamabaram clarifies, “this note does not deal with the need, if any, to revise entry fee”.

In this context, the PM’s statement is puzzling. Moreover, this “agreed formula” between the ministries, which was sent to the PM in July, comes six months after 2G licences were awarded on January 10, 2007, which only confirms that there was no concurrence before the LoIs were awarded. Moreover, “spectrum charges” is not the relevant issue for the 2G scam. The foundation of the 2G spectrum scam is that the entry fee for startup spectrum should have been obtained through a transparent auction. This jargon of entry fee and spectrum charges can be confusing but the devil as always, lies in the detail. Spectrum charge is an additional recurring fee that is paid by operators for the entire duration of license.

All recent inquiries by government panels also contradict the PM’s claim. The Shivraj Patil One Man Committee (OMC), which was set up by telecom minister Kapil Sibal, clearly outlines in Section 2.71 of its report that the department of economic affairs had raised concerns about A Raja’s policies.

Then finance secretary (now RBI governor) D Subbarao had written to the DoT questioning the giving away of spectrum in 2008 at 2001 prices, and specifically added: “Moreover in view of the financial implications, the Ministry of Finance (MoF) should have been consulted in the matter before you had finalized the decision.”

On November 29, 2007, the DoT secretary responded to Subbarao’s letter, but that does not satisfy Patil regarding “concurrence” on the 2G entry fee pricing between MoF and DoT. Patil notes in Section 3.2(xviii): “A procedure was formulated by DoT to collect the same entry fee paid by fourth cellular operator for inducting new UASL operators from 2003 onwards. This had financial bearing and also involved pricing of spectrum. This decision was not only contrary to recommendations of TRAI but was also taken without concurrence by MoF as required by GoI (Transaction of Business) rules and also as per decision of the Cabinet dated 31-10-03.”

Additionally, the DoT in its affidavit of November 11, 2010, informed the Supreme Court in Section 93 that there was “no further reference or communication” between MoF and DoT on this matter after the exchange of letters between the two secretaries.

The CAG’s report, released in November 2010, two years after the spectrum scam, additionally weakens the concurrence theory. It quotes MoF in Section 3.2.5: “In view of the directions of Union Cabinet (October 2003) and particularly in absence of requisite clarity in the recommendations of TRAI and decision of the Union Cabinet, in regard to the fixation of entry fees for new licensees, prudent principles of governance would have required DoT to engage in further inter-ministerial discussion particularly with MoF. The fact that this was not done despite repeated advices from the MoF does give scope of creation of doubt on the validity of the decision taken to fix the entry fee for new licenses at 2001 levels.”

Even when Subbarao recently deposed before the PAC, he made no admission of any concurrence between the two ministries.

It is now up to the JPC to unravel the truth by sifting through this maze of obfuscating material to propel the inquiry to its logical conclusion: recovery of lost revenue. The question is, does the JPC have the appropriate mix of neutral MPs with the expertise and patience to bring the perpetrators and beneficiaries of the scam (including some of their own) to book?

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Business tycoon T Ananda Krishnan could face Indian investigations over his takeover of Chennai-based cellular company Aircel in 2006.

The Indian Central Bureau of Investigation (CBI) is looking into alleged discrepancies in the ownership change in Aircel by Ananda Krishnan’s Maxis Communications.

The inquiry, as directed by the Indian courts, is to examine decisions taken by the Indian Telecom Ministry, including the decision to allow the takeover of Aircel by the Malaysian telco giant.

A report in the New Delhi-based Economic Times today stated that the CBI is likely to name former Telecoms Minister Dayanidhi Maran and Maxis over the ownership change. Maran is now the Indian textile minister.

The daily reported that a preliminary investigation is expected to be filed before July 6.

“Yes, we are at an advanced stage of investigations into the case. We will be in a position to file the FIR (first information report) before July 6,” a CBI official added.

During the deal entered by Maxis to takeover Aircel in 2006, the Indian telco was owned by C Sivasankaran. CBI officials investigating the case believed that Sivasankaran was under pressure to strike the deal.

According to the Economic Times report, the CBI is likely to allege in the FIR that actions of Maran in not clearing Aircel’s application for licences and spectrum as a telecom minister caused Aircel to be sold to Maxis.

CBI officials believed, the report added, the delay in granting licence and spectrum to Aircel was a ‘ploy’ to get them to sell to Maxis.

“A person, who was close to the negotiations between Sivasankaran and Maxis at that time, confirmed that pressure was brought upon the former to dispose off his stake,” add the report.

CBI officials also claimed that Ananda Krishnan was close to the Maran family.

Astro’s deal under spotlight too
The report further stated that CBI was also investigating Ananda Krishnan’s satellite station Astro All Asia Networks’ (Astro) Rs830 crore investment in Sun Direct TV to see if it was linked with the Aircel buyover.

Sun Direct is a part of the Sun Group owned by Kalanidhi Maran, southern India’s largest vernacular language broadcaster. He is also minister Maran’s brother.

Economic Times said Dayanidhi Maran refused to comment on the matter.

Economic Times had reported on Feb 15, 2011, that CBI was interested in the transaction between Sun Direct and Astro.

Sun had previously denied any quid pro quo between Dayanidhi Maran and Astro of Malaysia. Sun had also said that the MoU with Astro was signed in 1997 when Aircel was not even in existence.

Ananda Krishnan’s Maxis is Malaysia’s largest cellular phone company with more than 10 million subscribers, with around 40% market share in Malaysia.

As for the agreement between Astro and Sun Network, Ananda Krishnan has been reported as wanting to produce TV channels which cater to the Indian market, especially Tamil diaspora in countries such as US and Europe.

Ananda Krishnan is Malaysia’s second richest man, with a personal worth of more than US$7 billion.

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