 Hello and welcome to NewsClick. Today we are going to discuss the Rafale deal in which Anil Ambani is playing a major part because he has been made the partner who will take over from Rafale, the manufacturing locally of the aircraft from Dassault, the manufacturing in the aircraft. And therefore, the 50% supposedly what is called the offset is going to be done by his company. Now, the interesting part is Modi government had come to power based on the issue of 2G and 2G corruption. And Parujya who is with me in this show today remembers that 2G scam was not just about Mr. Raja and what was being done in order to give license to favoured parties, but there were certain favoured parties. And Anil Ambani's reliance was one of them who got through swan telecom the license. So, will you tell us a little more about Anil Ambani and his involvement in swan telecom and in that sense the beneficiary of the 2G scam was really his company. Pramit is very interesting that you are trying to draw a link between developments that took place quite a few years apart from each other. Now, there were many, many corporate conglomerates that were the alleged beneficiaries of the manner in which the then union communications minister, Andhya Muthur Raja followed his what is now evident deeply flawed, extremely corrupt system of first come, first served while allocating second generation electromagnetic spectrum. And one of the major beneficiaries, I mean the license as you know subsequently got cancelled by the Supreme Court, one of the major beneficiaries was the ADAG, the Anil Dhirubhai Ambani group headed by the younger sibling of the two Ambani siblings Anil Ambani and it all pertained to a company called swan telecom. Now, swan telecom was a very, very unusual corporate entity and if one goes by the charge sheet that was filed by the central bureau of investigation, it was held in a very, very convoluted, complicated manner through various firms in different parts of the world in tax havens and so on and so forth. But there was a very, very interesting side to it. It seemed you know there were so many companies and they started running out of names for the company and so swan was just one company. There were many, many names from that menagerie. It's almost as if they went to a zoo and there was a company called Zebra, another called Tiger, another called Parrot, another called Giraffe, another called Cheetah and so on and so forth. But the short point is Anil Ambani kept denying that he had anything whatsoever to do with swan telecom. The fact is he did not deny that his companies were involved with swan. He said I was not a party to the wrong doing. My people were, they are being charge sheet, they could be involved but I don't remember anything. Absolutely. So he did not say my companies are not involved. No he never said that in fact there were three senior executives of his who actually had to spend time behind bars. But both he Anil Ambani as well as his wife Tina, they said you know we sign on so many documents on so many papers of so many companies, hundreds and hundreds of them. We can't remember all of them. And the amount involved which they completely forgot or did not register was just a small amount, it was 1000 crores, roughly about 1000 crores. That small change for people of big conglomerates by Indian standards. The second part of it that's an interesting part is that the names on the swan telecom was registered under somebody's signature and that was Mr. Hari Nayar who is the one who has been charge sheeted and his email address was given as the reliance official email. I mean his email is the reliance IDG. That's correct. So CBI has charge sheeted him and two of his other colleagues who were clearly who against paper trail was available. And all along Anil Ambani kept saying that look you know I meet all the telecom ministers it's not just Mr. Raja I met Mr. Pramod Mahajan I met Mr. Kapil Sibal but the point is what they said and this is interesting is that what this the defense strongly denied was really the main allegation of the CBI and that was what prompted the CBI to call the Ambani as witnesses on the witness box was that this company the swan telecom was actually like a shell company. A shell company which was not eligible for the spectrum and the license that they got. Essentially that was the sum and substance of the CBI allegation. And the reason that reliance did not quote on their own of their own bad because they already had a license and therefore if they had got a second license that it was a violation of the license therefore they were not eligible they're not eligible. So they in fact were the maximum they could have held was up to 10 percent and officially they held about 9.9 percent or something and the rest was all held in the name of these animals from the zoo or the birds from the zoo as you have talked about. And you know it's very interesting the apiary and the menagerie or whatever what one of the interesting I mean for me as a journalist I came across I realized how do you obfuscate you know there's something called ownership and there's something called control and and heavy tomes have been written given the complexities of the company laws but typically what happens and this is something I found very easily one set of definitions is that you exercise managerial control only if you have majority shares in a particular company that means you have to have 51 percent. Now what happens is some of these deals are sliced and diced and unstructured in such a complex manner as to deliberately obfuscate the real owners often called the beneficial owners and how is it done? Say you have three corporate entities A, B and C or you can call them swan and parrot and cheetah or whatever. A holds 50 percent of B, B holds 50 percent of C and C holds 50 percent of A. Nobody's holding 51 percent these companies are ostensibly associated with one another yet nobody controls it. I mean these are some of the the legal slate of hand that is appropriate. But it's an interesting issue also that in this case particularly the swan telecom case reliance indirectly held I think they put in not held they put in 90 percent of the money and they did it as using share capital and preferential shares therefore they did not appear in the books as if they are the owners of the shares but leaving the shenanigans out the second part of it which I think again needs to be focused on that swan telecom got before it had received the licenses it had received loans from state bank of India and Punjab national bank even before it had received licenses and once it received licenses it got up to I think 3000 crores from the Indian public sector banks including Punjab national bank and state bank to the tune of 3000 crores only on the basis of the paper as we now know that paper was Kurt Simistra Raja but if it was Kurt Simistra Raja the beneficiary is clearly Mr. Ambani or his company and then and in fact if if he is the beneficiary the loser are the people of this country because they are the people who are ostensibly the shareholders of these nationalized banks and the owners of the spectrum. Secondly after the licenses received 44 percent of it is sold to Italy's at Emirates company and they pay a huge premium so before the company starts operation they have based on the fact they've got a license they've already got a huge premium whatever money they have got what they had actually spent they've already got much more than that now with all of that benefit from Mr. Raja benefit from the finance ministry virtue of the loans they have taken without essentially any asset being mortgaged just basis on the paper license same person today becomes a beneficiary of Mr. Modi is the largest that he becomes a preferred partner for the Rafale deal when in the sun aeronautics has already experienced abilities manufacturing setup and it can be expanded for the manufacture of Rafale as well while Anil Ambani's group has absolutely no manufacturing experience how do you explain it except crony capitalism absolutely you know Praveer whereas I have I can pretend to know a little bit about the whole so-called 2g spectrum scam case as one of its petitioners as one of the petitioners and but you know I'm not an expert really on defense deals but the little I've been able to understand and read and this is all in the public domain I mean they've been literally hundreds of articles that have appeared in all kinds of newspapers and magazines and websites they all kind of point towards one specific aspect you know this is not capitalism this is crony capitalism what how do you say it here you have a public sector undertaking HAL Hindustan aeronautics limited I'm not an expert so let me say as a layperson the way I see it it was supposed to be a major beneficiary of this agreement if you like with the French manufacturer and this was supposed to be a mutually beneficial deal because the French company was itself in a bad shape and no other Air Force from any other country were willing to buy its aircraft and it was only supplying its aircraft to its own Air Force so here was a very very crazy and inverted logic that was deployed to say here is India still ostensibly a developing country a third world country and here is a so-called advanced country in in Europe member of the Security Council with veto parts and here we are ostensibly trying to bail out a fighter jet manufacturer which is in in in dire straits and then the whole story gets an even more stranger and I would say pernicious twist when out of the blue a private player comes up and he's nowhere in the picture and suddenly in record time these companies are set up and before you know it once again Mr. Anil Ambani and his corporate entities seem to be all ready to laugh all the way to the bank and back so it's an interesting issue that here is the shall we say the preferred beneficiary of the 2g scam in which of course you detect as you know the Ruyas SRs you I think part of the loop that's correct though a unit a group with telly nor of Norway you know all these deals have been called unstuck completely they got all unstuck the foreign companies of course were left holding the bank as well as the banks both of them have taken very heavy hits on that but the promoters who actually benefited from both sides selling the shares as well as the licenses they as you said laughed all the way to the bank I mean there were some exceptions Mr. Sanjay Chandra who is heading the unit a group he ended up behind but which had nothing to do of course with the telecom scam it had something to do with their real estate deals it's also interesting that you know the Sanjay Mr. Chandra went to jail Mr. Anil Ambani did not his associates went to jail it does appear that it could be the government was more soft all Mr. Ambani than they were in Mr. Chandra for the telecom scam or it is that they Mr. Chandra's were much more open about what they're doing and Mr. Ambani his memory helped him by not being able to remember any of the transactions this company had done but leaving all of that out the point is that here is our companies who are deep deeply embedded shall we say or in bed with Mr. Raja on the 2G scam who now are center stage on the controversial Rafale deal but one second one second why are you surprised probate you know these individuals you named here Anil Ambani this would be true for many of the big industrialists the big capitalists of India and I dare say in many parts of the world they are for them in that sense apolitical Mr. Anil Ambani at one point of time was very close to the Samajwadi party the point is industrialists more than perhaps most others certainly know as to use a old somewhat archaic British phrase know which side their bread is buttered all they know who is in power and who is an authority and know exactly how to play that game that's how we'd like to end this part today that essentially what we're looking at are what appears to be the actors of the stage but who is directing the show for whose benefit that seems to be something which is not being registered or if it is it's not being talked about so the play might have been the actors in the play might be Mr. Raja might be the telecom secretary at that time Manmohan Singh's government and so on but the real people who are benefiting from it much more than Mr. Raja or the coterie around him but really those who made a killing out of these deals and they seem to be doing the same with Rafale deal today so essentially the play might have appeared to have changed but the actors at least behind the scenes continue to be the same thank you very much for the touch will be in conversation on these and other matters this is all the time we have a news click today keep watching news click visit our YouTube site or Facebook page and do get in touch with us if you have anything that you want us to do