2G Scam Reports
Spectrum Scandal and Telecom Minister’s covert activities
[Following are the reports published in ‘The Pioneer’ daily on the Specutrum scandal and violations by the Telecom Minister A.Raja by floating several companies, flooded with family family members]
Dec 11, 2008 – The Pioneer
How to become a crorepati overnight
When the spectrum controversy began to spin out of control and Telecom Minister A Raja was recently attacked by political leaders from within the UPA and outside for his questionable decisions, his mentor and DMK leader M Karunanidhi condemned the critics as people who could “not tolerate the rise of a humble Dalit”. As it turns out, the ‘humble Dalit’ allowed his ministerial clout and official address to be used for businesses which later connected with the spectrum deal, now under the scanner of the high court and the Central Vigilance Commission (CVC).
Not only did a commercial organisation, with the Minister’s wife as a director, begin operating from his official residence, well-placed sources said the information was concealed from the Prime Minister in violation of Service Rules. The Minister did not also deem it necessary to file an affidavit of ‘non-conflict of interest’ between his family’s business activities and his role as a Union Minister. In course of time, the address was changed and his wife officially withdrew from the firm. But the company’s association with the Raja family continued as closely as before, with the shares distributed among his kith and kin.
Green House Promoters Private Limited was formed barely four months after Raja became a Cabinet Minister (in charge of Environment and Forests) for the first time in May 2004. The Chennai-based real estate company was floated with an initial capital of only Rs 1 lakh, with AM Sadhick Batcha — a close associate of Raja — as managing director and Sadhick’s wife Reha Banu as a director. Sadhick hails from the Minister’s Perambalur constituency in Tamil Nadu. Documents filed with the Registrar of Companies show that Raja’s close relatives — such as his brother, nephew, niece and a few others — subsequently became directors in the company. With these high-profile inductions, the share capital of the firm surged to a respectable Rs 3 crore within 14 months of the operations being launched.Three years later, in February 2007, the Minister’s wife, MA Parameswari, was added to the board as a director.
Raja neither informed the Prime Minister of his wife’s and other relatives’ business activities, which he was mandated to do according to the Services (Conduct) Rules, nor filed an affidavit assuring there would not be a conflict of interest between his duties as a Minister and the business deals of his wife and other relatives.Even as Green House Promoters Private Limited continued to expand its real estate activities in Tamil Nadu (and Karnataka), with the Minister’s official residence doubling up as his wife’s business address, Raja was jolted by a report in early 2008 in a section of the media that pulled up the then Union Home Minister Shivraj Patil for using his official address as the business address for his son. Sensing trouble ahead, Raja got into damage control mode. His wife resigned from the directorship of the company on February 2008, but not before transferring her shares to another relative.
Documents available with The Pioneer show the shares were transferred to Raja’s niece, Malarvizhi. The 29-year-old is the wife of Raja’s nephew, a Government pleader in Tamil Nadu. The joint managing director of Green House is Raja’s elder nephew RP Paramesh Kumar. The Minister’s brother, A Kaliaperumal, is also a director of Green House. Another director of this company is R Ram Ganesh, the 22-year-old son of Raja’s elder brother A Ramchandran, who is an Indian Forest Service officer.From a humble beginning of Rs 1 lakh, the company soon soared to great heights.
One of the Green House company’s accounts at Canara Bank’s T Nagar branch in Chennai had remittances of more than Rs 150 crore over the last four years. The money came from the Middle East, Hong Kong and Singapore, besides India, though it remains unclear why these remittances were made.As the volume of business transactions increased, the company opened an office in Singapore in 2006. According to sources, it was done to cut down on the direct flow of funds into its Indian accounts and escape public scrutiny.The failure to inform the Prime Minister and file an affidavit was not a one-time lapse or an ‘oversight’ by Raja.
Wife Parameswari and the Minister’s relatives became active partners in another company floated a month after Green House came to exist. Breaching rules again, Raja did not inform the Prime Minister and filed no affidavit of non-conflict of interest. The new company, once again dealing in real estate, had a miraculously high turnover of Rs 755 crore in its very first year of operation.
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Dec 15, 2008 – The Pioneer
Zero to Rs 755 crore in a Year !
Telecom Minister family firm sets record turnover. Spectrum allottees investing?
The Pioneer had on Thursday reported that Union Telecom Minister A Raja’s wife MA Parameswari, a director in Green House Promoters Private Limited, used the Minister’s official residential address as her business address. This daily also noted that Raja had failed to file a ‘non-conflict of interest’ affidavit or inform Prime Minister Manmohan Singh of the business interests of his wife and other relatives. Parameswari was the company’s director till February 2008.
But this was not the only time the Minister had slipped on a mandatory requirement; he had apparently ‘forgotten’ to submit the required details when Parameswari first became a director in another company, Equaas Estates Private Limited, a real estate firm like Green House, which was established in September 2004.And as in the Green House case, the managing director of this company too was Raja’s confidant, Sadhick Batcha, from the Minister’s Perambalur constituency. Raja’s nephew RP Paramesh Kumar became the joint managing director. And, like the earlier firm, this company was also based in Chennai.
According to documents available with The Pioneer, it is this company which recorded a huge ‘domestic’ turnover of Rs 755 crore in the very first year of its operations.There is no mention in the documents filed with the Registrar of Companies about the source of this turnover. Form 23AC — to be filled by private limited companies for filing balance sheets/profit and loss statements with the Registrar of Companies — does not give any information on the following heads mentioned in the form: Sale of the goods manufactured; sale of the goods traded and sale or supply of the services. The form does not even indicate elsewhere how the turnover was achieved.
But talking about Green House, highly-placed sources in the Telecom Ministry told The Pioneer that Swan Telecom Private Limited, which has been in the news for being allotted in a controversial manner the 2G Spectrum licence, was likely to invest in Green House Promoters Private Limited — managed, as known, by relatives and close associates of the Telecom Minister. According to these sources, Swan planned to invest in 49 per cent equity in Green House at a dictated price of Rs 1,000 crore. To facilitate this financial deal, Greenhouse and Swan officials were reportedly working together with a Chennai-based audit firm.
When The Pioneer spoke to Sadhick Batcha over telephone, he confirmed that Green House was in an expansion mode. He also said the company was considering investment offers made by some firms. But when specifically asked whether Swan was one of these firms, he refused to confirm. The managing director said, “We are expanding but I cannot reveal the name of companies that are investing in Green House.” He directed this paper to contact one Kevin, ‘business adviser’ of Green House.Kevin, on his part, was equally cautious. “Green House is in talks for expansion. But I cannot confirm the names that are going to invest.”
Despite repeated attempts by The Pioneer, Swan Telecom managing director Shahid Balwa was not available for comment.“He will get back to you after some time. Currently, he is in a meeting,” said a person, who picked up his cellular phone. Balwa, however, did not return the call.It may be recalled that Swan Telecom bagged the licence for Rs 1,537 crore for operating in 13 circles in October. Within weeks, it sold 45 per cent of its shares to Etisalat, the UAE telecom giant, for $900 million (approximately Rs 4,500 crore). Swan Telecom’s roots can be traced back to July 2006, when it was established in the name of Swan Capital Private Limited.
The Mumbai-based firm, then part of a leading corporate house, was involved in non-banking financial services. The company applied for a GSM circle licence in January 2007. A month later, in February 2007, it changed its name to Swan Telecom Private Limited. In October 2007, the corporate house, that was already a strong name in the CDMA sector, quit the firm after the Centre announced a new telecom policy that allowed one company to operate both GSM and CDMA services. Two entrepreneurs – from the real estate sector — acquired Swan Telecom Private Limited. Balwa and Vinod Kumar Goenka became the new owners of the company. Balwa became the company’s managing director. Politically well connected, the young Balwa had been operating his real estate business from Mumbai.Unitech, another real estate company, also entered into a bumper deal without investing anything in telecom infrastructure. The company got a licence to operate in 22 circles for Rs 1,651 crore.
Within weeks of acquiring the circles, it sold 60 per cent shares for Rs 6,120 crore to a Norwegian company, Telenor, which is a major telecom player in Pakistan and Bangladesh. Unitech’s story, therefore, is not unlike Swan’s, which too disposed of part of its shares to a prominent foreign telecom firm after getting the 2G licence, in the process netting a huge profit.Interestingly, like Unitech and Swan, a number of real estate firms suddenly developed keen interest in the telecom sector over the last two years, virtually coinciding with Raja’s tenure at Sanchar Bhavan. This had upset the existing telecom operators, some of whom even complained to the Prime Minister over the reported ‘irregularities’ that followed.
The Minister, on his part, had justified the move, saying that he had attempted to break a powerful telecom operators’ cartel that had been working against public interest.Raja, Green House deny chargesUnion Telecom Minister A Raja has strongly denied any wrongdoing in the 2G spectrum allocation issue. Reacting to Thursday’s report of The Pioneer, Raja said he had nothing to do with the affairs of Green House Promoters Private Limited, the firm mentioned in the report, although his family members were part of its business. Green House too has denied in writing any irregularity.
The Minister said, “My wife, as an advocate, worked with them as the director (legal). She neither has any investment, nor attended any meetings.” He ruled out his involvement with the company, though he admitted to his close relatives being part of the firm. Sadhick Batcha, the MD of Green House, also said Raja’s wife was not a director of the board. “With regard to her involvement, I would like to clarify that she was appointed the director (legal) to advise on legal issues. She neither has any shares nor any involvement in the day-to-day management of the company,” he stated.
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Dec 18, 2008 – The Pioneer
Why is BSNL sharing spectrum with pvt players?
Minister Raja makes company infrastructure available to competitors almost free. We have seen how Telecom Minister A Raja facilitated spectrum allotment to a bunch of private players on first-come-first-served basis. His decision resulted in a raging controversy, leading to the demands for his resignation and parliamentary probe into a range of affairs, including the business interests of his immediate family members. It now appears that the enterprising Minister had not just facilitated the spectrum allotment; his benign attitude went farther – in persuading the Ministry’s flagship unit, the Bharat Sanchar Nigam Limited (BSNL), to help out one of the licencees, Swan Telecom.
Within weeks of allotting the spectrum licence to Swan, Raja helped it have a strategic arrangement with the State-owned BSNL, literally for free. A memorandum of understanding (MoU) on September 13 between BSNL and Swan, called the Intra-Circle Roaming Agreement, does not indicate even a nominal sum that BSNL is charging for sharing its infrastructure. Incidentally, this is the first deal of its kind that the BSNL has entered into with any private player.The BSNL has been rather secretive of its charitable attitude towards Swan. Its Website does not have a word on this important development wherein a public organisation offers its services for free to a private party.
BSNL chairman and managing director Kuldeep Goyal confirmed the arrangement and termed it a “limited MoU”. Talking to The Pioneer, he said he could specify what charges BSNL planned to levy for providing the unprecedented intra-circle roaming facility to a private operator.When asked specifically on charges that BSNL may seek from Swan, Goyal replied, “See, this is only a limited MoU. No agreement has been signed with them. Swan has not yet started its operations. We are working out the details. I can’t tell you all details of the MoU. The money part will be specific in due course of time. I don’t know how much money we are going to levy on them. I told you this is only a limited MoU; specifics will be discussed when we come to a final agreement.”
The Pioneer has learned through highly-placed sources that the high-level management committee of BSNL had recommended 52 paisa per call from Swan for providing the intra-circle roaming facility. But this recommendation found no mention in the “limited MoU”.Sources further informed The Pioneer that the “limited MoU” greatly helped Swan in later sewing up the deal with the UAE-based telecom company Etisalat, which picked up stake in Swan for a reported sum of $900 million (approximately Rs 4,500 crore) in October.Some officers of the Wireless Planning and Co-ordination (WPC) section in Sanchar Bhavan, who objected to the BSNL-Swan deal, were shunted out. Joint Wireless Adviser RJS Kushwaha and Deputy Wireless Adviser D Jha were transferred out for questioning the arrangement. Telecom officials say Swan is expected to benefit to the tune of at least Rs 1,000 crore since it would not have to invest in infrastructure.
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Jan 12, 2009 – The Pioneer
Raja’s kin in Govt job, but still on pvt firm roll
Minister’s Dy. Director nephew has major stakes as director in real estate company
The presence of Union Telecom Minister A Raja’s close family members in private companies raised a political storm recently after The Pioneer revealed how the Minister, in contravention of rules, concealed the information from the Prime Minister. While the Minister then wriggled out by offering lame excuses, he would have some explaining to do about the latest revelation: His nephew Dr R Sridhar, who happens to be a deputy director in the Ministry of Environment & Forests, is also a director with significant stakes in a private limited company. He was selected for the Government post during Raja’s tenure as the Environment & Forests Minister.
Just like his uncle, Dr Sridhar also flouted the service rules when he failed to inform the Government before joining its service that he was a director with 15 per cent stakes in Kovai Shelters Promotors (Private) Limited. Incidentally, he continues to be a director with the Coimbatore-based real estate firm, established in January 2007 and headed by the Minister’s associate from his Peramballur constituency, Dr C Krishnamoorthy.
Not just that, Section 13 of the All India Services (Conduct) Rules bars a Government servant from having any interest in any private business or company. But, sources said, Sridhar never informed the Government of his being on the board of the private company. When The Pioneer contacted Sridhar for his reaction, he said, “I cannot comment right now. I have to check with Kovai Shelters.” He brushed off the important matter of holding private business interests while serving as a Class I Government officer. “I am busy now. I told you I have to consult my people,” he said.Sources in the Ministry told The Pioneer that Raja, then Environment & Forests Minister, had taken a keen interest in his nephew’s recruitment soon after the company was formed. They added that though the 29-year Sridhar lacked the mandatory five-year work experience, he was selected for the post on the basis of a dubious certificate of experience.
“Sridhar (who did his doctorate in marine biology) produced a certificate from his guide, Dr L Kannan, that he had been assisting him for the past five years. Though we objected to the claim, we were forced to oblige the Minister under pressure,” sources added. Kannan is currently the Vice-Chancellor of Thiruvalluvar University in Tamil Nadu. Sridhar joined the Government’s service in November 2007 after obtaining the requisite clearances for the appointment of Class I officers. Sources said that he concealed the information of his private business all through the inquiry process.
Apart from Sridhar, Raja’s nieces R Anandabhuvaneswari and R Santhanlakshmi also have a 15 per cent share each in the real estate firm.Krishnamoorthy also owns a Coimbatore-based finance company, AGM Investment and Finance Private Limited, along with his brother C Sathyanarayan. They bought the firm in November 2004, soon after Raja became a Cabinet Minister. Incidentally, prior to becoming a Minister, Raja operated his law business in Peramballur from the first-floor office of Krishnamoorthy’s building.
The Pioneer has already reported the saga of two companies owned by Union Telecom Minister Raja’s close relatives. Green House Promoters (Private) Limited and Equaas Estates (Private) Limited were floated soon after Raja became a Union Minister. His wife Parameswari also served as a director on the Board of these two firms. Flouting rules, Raja had not filed information about his wife’s business to Prime Minister Manmohan Singh. Raja’s nephews RP Paramesh Kumar, R Ramganesh, brother A Kalia Perumal and niece Malarvizhi Ram are the directors of these two companies.
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Jan 29, 2009 – The Pioneer
Firm with Rs.1 Lakh gets Rs.380 Cr Swan shares
When the 2G spectrum controversy broke out and allegations of covert deals surfaced in awarding licences to Unitech and Swan, a defensive Union Telecom Minister A Raja had claimed that no person from Tamil Nadu, and least of all he, was associated with or knew any of the firms. “These all are west Indian and north Indian companies. How can you say I have favoured them? These companies do not even belong to Tamil Nadu,” he had told reporters on several occasions.
But documents available with The Pioneer refute the Minister’s claims of innocence in the matter.The links with Swan get established through a Chennai-based firm, Genex Exim Ventures Private Limited, which was formed four months ago with a paid-up capital of just Rs 1 lakh. Entirely out of proportion to its size, Genex was on December 17, 2008, allotted shares in Swan Telecom worth a little over Rs 380 crore.
It may be recalled that Swan was one of the firms that was awarded the 2G licence on a first-come-first-served basis and, that too, on a licence fee fixed seven years ago. The resulting controversy impacted the 3G spectrum bidding process, which has been put on hold by the Union Government despite the Union Telecom Minister’s desire for a speedy allotment.According to documents filed with the Registrar of Companies in Chennai, Genex was incorporated on September 17, 2008, with two directors — Mohammed Hassan (58) and Ahamed Shakir (41). The company was represented by Ahmed Syed Salahuddin (32) on the board of Swan. The three belong to Kilukarai, a small coastal village in Ramanathapuram district of Tamil Nadu.
The Tamil Nadu link now gets strengthened. Ahmed Syed Salahuddin is the younger son of Syed Mohammed Salahuddin, an NRI business tycoon heading the Dubai-based real estate conglomerate, ETA Ascon Star Group, which began its Indian operations in 2006 by floating several real estate firms across the State. Raja was then the Union Environment Minister and his party, the DMK, had assumed power in Tamil Nadu.
The ETA Group entered into an MoU with the Tamil Nadu Government for setting up an IT Special Economic Zone worth Rs 3,750 crore when A Raja became the Union Telecom Minister in May 2007. Tamil Nadu Chief Minister M Karunanidhi was present at the much-hyped MoU-signing ceremony for the project. It was proposed at Kancheepuram, near Chennai, on almost a 500-acre plot.It is mysterious that a major business group should enter Swan’s board through a company with a meagre Rs 1 lakh paid-up capital. Incidentally, Genex Exim, having acquired more than 10 per cent of Swan Telecom shares, has not filed any document with the authorities to show its source of income. When contacted, a representative of the company refused comment.
Earlier, Swan’s plan to invest in Green House Promoters Private Limited, a firm run by Raja’s relatives, fell apart after The Pioneer reported the dubiousness of the deal on December 15, 2008.
According to the list of allottees filed by Swan with the Registrar of Companies in Mumbai, 1,33,17,245 shares having a nominal value of Rs 10 were allotted to Genex Exim at a premium of Rs 276 per share. Etisalat, one of the UAE’s major telecom players, was allotted shares in Swan. Etisalat was given shares worth more than Rs 3,000 crore through its Mauritius-based unit. Besides, 11,29,94,228 shares were allotted to Etisalat while the founder shareholder, Tiger Trustees, kept 1,73,01,463 shares worth Rs 495 crore with itself.
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Feb 1, 2009 – The Pioneer
Scandal in the Airwaves
There is a joke in the telecom industry on the origins of the 2G (Second Generation) spectrum controversy. When Dayanidhi Maran had to resign as Telecom Minister in May 2007, and the then Minister for Environment and Forests A Raja stepped into his shoes, the new Telecom Minister brought with him to Sanchar Bhavan, the headquarters of the Telecom Ministry, those real estate brokers who normally hang around Paryavaran Bhavan (headquarters of the Environment Ministry). It was in this way, telecom industry insiders laugh, that a clutch of real estate brokers got a toehold in the telecom sector. These real estate brokers soon cornered spectrum allocations, resulting in a tussle for the sharing of the scarce electromagnetic waves between existing telecom services providers, and the ‘new services providers’.Facts relating to the spectrum scam weren’t much different.
The scam can be traced to real estate companies — Swan and Unitech — bagging spectrum licences at throwaway prices. They then offloaded their shares at exorbitant prices to multinational telecom giants. Swan Telecom, for instance, bagged licences for operating in 13 circles by paying a mere Rs 1,537 crore. Within months, it sold 45 per cent of its shares to Etisalat, the UAE telecom giant, for US $900 million (approximately Rs 4,500 crore). Swan Telecom was earlier known as Swan Capital and owned by Anil Ambani. In 2007, this company was taken over by Maharashtra based real estate entrepreneurs Shahid Balwa and Vinod Goenka. There are rumours in telecom circles that the takeover by Balwa and Goenka was felicitated by Raja.
Unitech, another real estate company, too reaped a bumper harvest without investing a penny in telecom infrastructure.The company got licences to operate in 22 circles for Rs 1,651 crore. Within weeks, it sold 60 per cent of its shares for Rs 6,120 crore to the Norwegian company Telenor, currently a major telecom player in Pakistan and Bangladesh. Unitech had applied for licences in several names — Unitech Infrastructure, Unitech Builders and Estates, Aska Projects, Nahan Properties, Hudson Properties, Volga Properties, Adonis Projects and Azare Properties among them. They were able to merge all their licences when Telecom Minister Raja signed another dubious notification allowing this to happen. Valued at a whopping Rs 60,000 crore, the 2G spectrum allocation scam is perhaps the mother of all scams in India.
After he became Telecom Minister, A Raja allotted 2G spectrum to new entrants in the telecom sector at throwaway prices. Spectrum allotted in the beginning of 2008 was sold at rates fixed in 2001. This happened in spite of the Telecom Regulatory Authority of India’s (TRAI’s) — and the Finance Ministry’s — vehement objections. There was also no auction, and licences were given on a shabby ‘first come first serve’ basis. Third, the entire procedure lacked Cabinet approval, even though deals involving such huge sums of money require mandatory approval of the Cabinet Committee on Economic Affairs.
Even as the allegations broke out, Raja kept insisting he was sticking to the rulebook. He justified his decisions saying he was trying to break the cartelisation in the telecom sector, and claimed that the ‘aam aadmi’ would benefit by his actions. Even his party chief and Tamil Nadu Chief Minister M Karunanidhi rubbished the allegations against Raja, saying that leaders of certain political parties could not tolerate the rise of a Dalit.A series of investigative reports by this newspaper, however, suggested otherwise. The Telecom Minister’s money parking methods — by floating companies in the names of close relatives — was soon out in the open. After Raja became a Union Minister in 2004, many of his close relatives started real estate companies. Companies like Green House Promoters, Equaas Estates and Kovai Shelters Promoters have Raja’s brothers, nephews and nieces as directors on their boards. The Minister even got his wife, MA Parameswari, appointed on the board of directors for Green House and Equaas Estates. This he did by violating another code — the service rules and the code of conduct for Ministers.
As a Cabinet Minister, Raja had to inform the Prime Minister about his wife’s business, and file a mandatory affidavit saying there was no clash of interest in the discharge of his duties. He did neither. The Minister now defends himself by saying the entries with the Registrar of Companies are wrong, and that he and his wife were not aware that she was a director in Equaas! Equaas Estates’ domestic turnover, on the other hand, showed more than Rs 755 crore in its very first year. Even this, Raja now says, was a “wrong entry” in the books of the Registrar of Companies. Meanwhile, Green House Promoters, one of the many companies with Raja’s relatives on its board, opened an office in Singapore in violation of Indian foreign exchange norms. And one director of Kovai Shelters, Dr R Sridhar, a nephew of the Telecom Minister, holds a 15 per cent share in the company despite being a Class I officer in the Ministry of Environment.
In earlier instances, Raja often defended himself by saying Swan and Unitech were Maharashtra and Delhi-based companies, and no one from Tamil Nadu was associated with them. Documents filed with the Registrar of Companies, Mumbai, however, prove otherwise. On December 17, 2008, Swan allotted Rs 380 crore worth of shares to the Chennai-based Genex Exim Ventures, a company floated just four months ago with a meagre capital of Rs 1 lakh. According to the documents available with the Registrar of Companies, Chennai, Genex was incorporated on September 17, 2008 with two directors — Mohammed Hassan (58) and Ahamed Shakir (41) — who came from Kilukarai, a small coastal village in Ramanathapuram district in Tamil Nadu. Ahmed Syed Salahuddin (32), who represented the company on the board of Swan, also came from the same village.
There is more indication of the Tamil Nadu link. Ahmed Syed Salahuddin, who represented the company on the board of Swan, is the younger son of Syed Mohammed Salahuddin, an NRI businessman who heads the Dubai-based real estate conglomerate ETA Ascon Star Group. This group began its Indian operations in 2006 by floating several real estate firms across the State. Raja was then Union Environment Minister, and his party DMK had assumed power in Tamil Nadu. ETA signed an MoU with the Tamil Nadu Government for setting up an IT Special Economic Zone worth Rs 3,750 crore when A Raja became Union Telecom Minister in May 2007. Tamil Nadu Chief Minister M Karunanidhi was present at the MoU signing ceremony for the proposed project at Kancheepuram, near Chennai, on a nearly 500 acre plot.It seems mysterious that a large business group entered Swan’s board through a company with a meagre
Rs 1 lakh paid up capital. Incidentally, Genex Exim has not filed any document with the authorities to show its source of income, even after acquiring Rs 380 crore worth of shares of Swan Telecom.
How Raja had blatantly favoured Swan was evident from a rather unusual deal struck between that company and the state-owned BSNL. This “intra-circle roaming deal”, signed between the two companies on September 13, 2008, was literally silent when it came to money. According to the MoU, Swan could use spectrum, communication towers and the entire network of BSNL free of cost. Though the BSNL management suggested charging 52 paise per call, this clause was mysteriously absent in the MoU. BSNL was forced to sign this deal just 10 days before the sale of Swan’s shares to Etisalat. It helped swell Swan’s coffers without the company investing a single rupee.BSNL had never entered into an “intra-circle roaming deal” with any operator till then. When controversy broke out, BSNL Chairman and Managing Director Kuldeep Goyal sought to quell the trouble by coining a new word for it — a “Limited MoU”!
Meanwhile, Raja shunted out all senior officials in BSNL and the Wireless Planning Co-ordination (WPC) wing of the Telecom Department who objected to the deal. Top telecom officials alerted the Prime Minister, but nothing came out of it. Even a Congress MP, Dharam Pal Sabharwal, wrote to Manmohan Singh in November 2008, but with no result. Another letter written to the Prime Minister by CPI(M) Politburo member Sitaram Yechury in February 2008 clearly warned of a “scam in the offing” when more than 575 real estate companies and stock broking firms approached the Telecom Ministry for spectrum licences. All this while, Raja kept insisting that he had the approval of the Prime Minister.
The Telecom Minister even blatantly lied in Parliament when he said his decisions on 2G spectrum allocation were never objected to by TRAI or the Finance Ministry.The unreformed Raja was also eager to allot 3G (Third Generation) spectrum before the end of his tenure. His attempts, however, came to naught after the Government decided to refer the 3G auction to a Group of Ministers. Earlier scheduled for January 16, the date was changed to January 30 and has now been deferred indefinitely after the intervention of the Cabinet Secretary, who suggested a “thorough study” into the process.
Current developments however suggest that the auction may not take place during the tenure of this Government. The question that arises now is, who authorised Raja to announce the auction dates in advance, before getting a Cabinet clearance?Although he was aware of Raja’s corrupt ways, it was perhaps the compulsions of coalition politics that kept Prime Minister Manmohan Singh away from stepping in and setting things right. For, observers believe, every time he summoned Raja, Raja’s party chief Karunanidhi landed in Delhi and dashed off to the Congress leadership, asking it to keep the Prime Minister quiet. This is perhaps what happened on December 4, 2008 when Karunanidhi landed in Delhi with a multi-party delegation to raise the issue of the ‘plight’ of Sri Lankan Tamils. The delegation met the Prime Minister at 10 am. An hour later, the DMK chief met Sonia Gandhi along with his daughter Kanimozhi — this time separately. Even his close confidant, Union Minister TR Baalu, was asked to leave after the photo session. After the meeting, Karunanidhi held a Press conference where he said he had discussed the Sri Lankan issue with the Prime Minister and Sonia Gandhi. Sceptic Tamil leaders, however, wonder why were not allowed to participate in the talks with Sonia Gandhi when they were all present in the meeting with the Prime Minister. Many of them believe that Karunanidhi had in fact asked for Sonia Gandhi’s ‘help’ in sharing the burden of the spectrum scam during that meeting.
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Feb 18, 2009 – The Pioneer
Raja kin lied over resignation
Worked simultaneously for Govt and private company till Pioneer expose
Facing charges of holding the post of director in a private company while being in the service of the Central Government, Telecom Minister A Raja’s nephew Dr R Sridhar has found an ingenious way to wriggle out of the mess.Serving a legal notice on The Pioneer for exposing the violation of All India Services (Conduct) Rules, which bar Government employees from associating with private business, Sridhar has claimed he resigned from the private company nearly a year ago, on March 24, 2008, to be precise. But the online registry of the Ministry of Corporate Affairs shows that Sridhar submitted his resignation on January 27, which is two weeks after The Pioneer expose on him. But to escape action for violating the Government rules, he pre-dated his resignation letter to March 24, 2008.
The Pioneer had on January 12 reported that Sridhar, who is a Deputy Director in the Ministry of Environment and Forests, simultaneously held the directorship in the Chennai-based Kovai Shelters and Promoters Pvt Ltd. Interestingly, documents of the Registrar of Companies, Coimbatore, show that Sridhar was very much a director of the Kovai Shelters and Promoters Pvt Ltd when its last annual general body meeting took place on August 7, 2008. Sridhar’s appointment to the post of Deputy Director in the Ministry of Environment and Forests was notified when his uncle Raja headed the Ministry in early 2007.
Sridhar, who holds a doctorate in marine biology, did not have the mandatory five-year experience.Sources in the Ministry said Sridhar had produced a certificate from his research guide that he had assisted him for five years. According to them, the officials were forced to accept the experience certificate produced by Sridhar and the guide — Dr L Kannan —was later elevated as the Vice-Chancellor of Thiruvalluvar University in Tamil Nadu. In a legal notice sent to The Pioneer, Sridhar claimed that he had joined Government service on March 26, 2008, and left the real estate company’s directorship two days prior to that.
Sridhar also violated the Government’s recruitment rules by suppressing the fact that he was holding the directorship and 15 per cent shares in Kovai Shelters. Apart from Sridhar, Raja’s nieces R Anandabhu-vaneswari and R Santhanlak-shmi also have 15 per cent shares each in the real estate firm. Raja’s close associate, Dr Krishnamoorthy, is the managing director of this company. Krishnamoorthy also owns a Coimbatore-based finance company, AGM Investment and Finance Private Limited, along with his brother C Sathyanarayan. They bought the company in November 2004, soon after Raja became a Cabinet Minister. Incidentally, prior to becoming a Minister, Raja operated his law business in Peramballur from the first-floor office of Krishnamoor-thy’s building.
The Pioneer has already reported the saga of two companies owned by Union Telecom Minister Raja’s close relatives. Green House Promoters (Private) Limited and Equaas Estates (Private) Limited were floated soon after Raja became a Union Minister. His wife Parameswari also served as a director on the board of these two firms. Flouting rules, Raja had not filed information about his wife’s business to Prime Minister Manmohan Singh’s office. Raja’s nephews RP Paramesh Kumar and R Ramganesh, brother A Kalia Perumal and niece Malarvizhi Ram are the directors of these two companies.
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March 5, 2009 – The Pioneer
Max greed: Raja’s friend shows how to mint profit
Even as the dust is yet to settle on the 2G and 3G scandals allegedly involving A Raja, the Union Telecom Minister is embroiled in another controversy. This time, it is to do with the allotment of franchisees for BSNL’s recently-launched WiMax services to a company owned by one of the Minister’s close associates from Perambulur.The company, Wellcom Communications India Pvt Ltd, has applied for licences to seven most revenue-generating of the 16 circles in India.
According to sources, the revenue-sharing pattern agreed upon is 75 per cent to the private party and 25 per cent to BSNL. Sources said that if the company gets the nod for the 20 Mega Hz spectrum, it may sell off stakes to foreign players at huge profits, like in the 2G case.They have questioned the need even for the appointment of franchisees when the BSNL can directly provide the service. WiMax technology provides wireless Internet and voice in future to laptops and mobile phones. The number of WiMax connections is expected to rise to 50,000 subscribers in the first year itself, leading to a target of 1 million subscribers in five years in each circle.Wellcom Communications applied to be a franchisee in November 2008.
The Chennai-based company, which was initially engaged in minor engineering and construction works, was formed in December 2006 with a Rs 10-lakh capital. This went up to Rs 10 crore in November 2008, apparently with an aim to enhancing the company’s credibility for the WiMax bid.Wellcom Communications is represented by T Silvarajoo (55) with 15 per cent shares. The other two directors are Dato Vijayakumar Ratnavelu (47) and T Gunasegaran Thiagarajan, both Tamilians with a Malaysian citizenship. Dato Vijayakumar is also running a company with the same name in Malaysia.
Silvarajoo hails from Raja’s constituency Perambulur and is a close associate of the Minister. He is also associated with Dr C Krishnamoorthy, in whose building Raja had begun his legal practice in the constituency. Silvarajoo is currently a sub-contractor of CPWD’s road works. He supplies pellets from a quarry owned by Krishnamoorthy for the ongoing Chennai-Tiruchirappally National Highway (NH-45) project.The Pioneer had earlier reported that Krishnamoorthy headed a real estate company, called Kovai Shelters, with Raja’s nephew and two nieces on its board of directors with 45 per cent shares.
Though the BSNL had invited franchisees a year ago, it postponed the bid several times allegedly due to pressure from the Minister who, sources said, kept adding names to the original list. Apparently under Raja’s pressure, BSNL chairman and managing director Kuldeep Goyal initiated the franchise-awarding procedures in mid-January. Despite repeated attempts by The Pioneer, the CMD refused to talk to this newspaper.Wellcom Communications has applied for Chennai, Karnataka, Rajastan, Bihar, UP (West), Haryana and Orissa circles.
The Pioneer has learned that the BSNL would finalise the franchise by next week.The Pioneer had earlier reported that the BSNL had entered into an unprecedented arrangement with the private party, Swan Telecom, for intra-circle roaming service without any financial benefit to the public sector unit. Though a BSNL expert committee had suggested a levy of 52 paise per call, it found no mention in the MoU signed with Swan.
The Pioneer has also reported the saga of two companies owned by the Minister’s close relatives. Green House Promoters (Private) Limited and Equaas Estates (Private) Limited were floated soon after Raja became a Union Minister. His wife Parameswari also served as a director on the board of these two firms.
