 Hello and welcome to NewsClick. Today we have with us Paruja Gohadhakutta and we will be discussing the 2G judgment which has come very recently in which a Raja seems to have been exonerated. Paruja, the 2G judgment seems very strange because on a case where the Supreme Court has already opined that there was a violation of the basic principles of equity to which any government property should be alienated, namely in this case the spectrum. This judgment seems to say that not only that criminal intent was not proven or the crime evidence was not strong enough, but it seems almost to have given Raja a clean chit and blamed a whole bunch of people including lack of procedures in the Department of Telecom. You know, I was very very disappointed by Justice Opie Saini's judgment which was delivered on the 21st of December 2017. The main judgment runs into over 1500 pages. This is the CBI case pertaining to alleged irregularities in the allotment of second generation telecom spectrum and this excludes of course his other judgments in the case which was instituted by the Enforcement Directorate. You know, I think this judgment is deeply flawed. It gives a clean chit to 17 accused persons including the former Union Telecoms Minister, Telecommunications Minister Andi Muthurajai. It includes former Member of Parliament belonging to the DMK, the Dravidha Munnaitra Khajagam Kanimui who also happens to be the daughter of the DMK Suprimo Karunanithi and a whole host of others including former Telecom Secretary Siddharth Pehura including executives of the Reliance Anil Thirubhai Ambani Group, Gautam Doshi, Sudendra Pippara, Hari Nayar. It includes the promoters of Sworn Telecom, Shahid Usman, Balwa Vinod Goenka among others. You know, and there is since this judgment, there's been so much noise. You know, Congress is saying we have been vindicated. Mr. Raja says I was right, everybody and his brother is talking about this judgment. I think it's quite important to demystify this judgment. And let's start from the very basics. What after all are we talking about? What is second generation electromagnetic telecom spectrum? It's thin air. You know that. At the end of the day, it's a scarce resource. Why? Because it's a finite resource. Across the world and also in India, it's allotted by the government to four particular users and by particular companies. In this case, private mobile telecommunications companies. This is public property in as much as it's a scarce resource. Correct. And therefore, it has to be alienated with proper procedures for public good. Correct. So, because it's a natural resource, because it belongs to the people of this country, it has to be allocated and priced in a transparent manner. Let's come to the basic issue. The policies. First come, first served. Was this the appropriate policy to allocate a scarce resource? I would clearly say no. And this is where Justice Saini's judgment just sort of covers up the issues. It doesn't get into the basic issue that why should the government allot a scarce national resource in this manner, in the manner in which cinema tickets are sold. Literally, you're first in the queue. The next part of the story is how even the first come, first served process was subverted, was manipulated, was tweaked. And finally comes the question of criminality. So, I think the first part that we need to look at is though Justice Saini has given, has showered praise on the present principal secretary to the prime minister, Mr. Nipendra Mishra. And Mr. Nipendra Mishra at that point of time happened to be the chairman of the telecom regulatory authority of India. There's a very, very famous paper that he put out at that point of time which made things a little ambivalent as to whether certain kinds of spectrum ban should be auctioned and whether it was okay to allot other bans on a first come, first serve basis. The ambivalence left a lot of scope for interpretation. Though subsequently Mr. Mishra repeatedly told the court that no, he was not in favor of the manner in which the allotment took place, which is first come, first serve. And whatever Mr. Raja may say, the then prime minister, Dr. Manmohan Singh, the then finance minister, the then law minister, all the bureaucrats, none of them approved this policy. It was his and he pushed it. What was really the outcome? In 2001, you had a price that had been discovered. It was discovered through an auction. That price was 1658. This is the fourth cellular license. Seven years later, you're selling that same spectrum at the same price. Though in this intervening seven-year period, the market has virtually doubled every other year. So in fact, let's put the figures over there. It was 4 billion in 2001 in terms of subscribers. By the time this first come, first served policy is being continued at that price, the telecom market had come to 350 billion. It's almost 75 times. That's right. So in other words, in this intervening seven-year period, the market was growing at a very, very rapid pace. Now under the circumstances, I don't think it can be under any circumstances being justified. What Mr. Raja did. Today, Mr. Raja may claim, thanks to him, the price of telecom services to ordinary consumers was low. But I think none of them can be justified because all this happened despite the fact that the Supreme Court, as you rightly pointed out, in February 2012, cancelled no less than 212 licenses, which were controlled by roughly 122 licenses controlled by roughly 12 corporate groups. These were cancelled on the 2nd of February 2012 by a bench of the Supreme Court comprising Justice G.S. Singhvi and Justice Iki Ganguly. Now this judgment, remember Justice Opishani's court was set up, the special CBI court was set up in March 2011. More than six and a half years later, in December 2017, he issues his judgment, which is clearly the two judgments are not in sync with each other. The government has appealed and I personally believe it will be very difficult for this judgment to be sustained by the higher court of law. Yes. You know, this is of course one could argue that the purpose of these two judgments are different. In the case of what the Supreme Court looked at, it is a question of whether the license had been issued on the principles of equity and so on. Irregularity, unconstitution, didn't adhere to the rules of the Telecom Regulatory Authority of India. So this was really a kind of whether the procedures were fair to allocate the licenses. This could be stupidity, for instance, that you could do be unfair due to stupidity due to ignorance or prejudice of different kinds. But when you are coming to a criminal case, of course, you have to prove criminal intent, criminality, conspiracy and so on. So, Signe himself has said that there are two different parts of it and the last part of the two judgment says that this shall not prejudice the CBI court case. Okay, let's go step by step. Let's first look at procedures. I've already argued and you seem to be agreeing with me that the first come first serve system was not the way you should have allocated spectrum for. Now come to the procedures. Having gone ahead with the first come first serve procedure, what did you do? Between March 2006 and the end of September 2007, in this period of time, you had received somewhere in the region of about, well, 575 applications. Now clearly, there wasn't enough spectrum for everybody and everybody knew that you couldn't do it. But how did you go about reducing the number of applicants? What you did, you kept quiet and then on the 10th of January 2008, the Department of Telecommunications issues two press releases. The first press release advances the cutoff date to 25th of September, thereby eliminating many of the applications and reducing the number of applications to 1, 2, 2. What happened that same day was even more pernicious and terrible. You issued another press release at 2.30 pm on the 10th of 237. Okay, and what did you say? That you have time between 3.30 and 4.30 the same day to give in your proposal. Here were bank drafts running into literally thousands of crores which were materialized out of nowhere. Obviously, it means people had prior knowledge. But the short point is you had followed a system which was corrupt to the core and it doesn't require a particularly intelligent person to understand. Now here is further evidence of what she was saying. They had four parallel counters in which people were given the letters of indent. They had to collect it and based on these letters they had to rush to another place where the sequence determined what was called first to comply. That means who gave in the bank guarantees in what order would decide whether they would get the spectrum or not. Now the sad part of the whole story was even this whole system is completely done away with. For instance, the Supreme Court found that out of these 122 licenses, 85 applicants did not even qualify for the licenses. Why they did not have the minimum network that was required? Secondly, the existing licensee could not have more than 10% equity in the new applicants shares. Now these two were subverted and the most egregious example of that pertain to swan telecom private. Remember how did this circumvent that process? The ADAG group headed by Anil Ambani invested 992 crores in this company swan but through a convoluted route through preference shares. Thereby claiming it was not in the equity. It was not an equity share but the investment was an investor. Even the so-called inter say seniority was done away with to favor particular companies like swan, like unitek, like videocon at the expense of others including spice telecom. Now what was truly amazing was that this was not very dented. As if this was not bad enough. What Mr. Raja did was that he bypassed the recommendation. He ignored the recommendation not only on Mohan Singh and Chidambaram and the then finance secretary Subha Rao and the then officer in the prime minister's office Pulok Chatterjee. Incidentally, all of them have been castigated very strangely by Judge Shani. Also, he's been very very harsh Mr. DS Mathur who was telecom secretary who retired on the 31st of December 2007, 10 days before the actual allocation took place by which time Mr. Siddharth Bihura had taken over charge telecom secretary. The same person who had been environment secretary under Mr. Raja. But the short point that I'm making here is that an important condition, the license condition was that you could not resell your equity for a three-year period. This was overruled by Mr. Raja. As a result of which Etilisat paid swan 3,217 crore rupees for 44.7% shares. Telinor paid unitek 6,210 crore for equity stake of 67.3%. Tata Teleservices had a deal with Dokomo of Japan which later went unstuck for very very different reasons. But the short point is here was procedures. Even if you assume that you go ahead with what I believe was a flawed first come first serve system you even tweak that system. You even messed around with those procedures. In fact, what happens is first come first served becomes first to comply in terms of getting spectrum. And as we know license is really not the issue. Spectrum is the core of the issue because spectrum was bundled with the license and therefore Raja's argument that license can be given on first come first served but spectrum should be given on first to comply. This was not a procedure which had never been followed. This was a big leave to cover up the manner in which you allocated this scarce national resource. Let's come to another person who's been absolutely the target of the Congress party today. The then controller and auditor general of India, Vinod Rai. Now interestingly what happened? The report of the CAG which was submitted on the 10th of November 2010 was leaked a few days earlier. It had become common knowledge. Mr. Raja had to put in his papers. The CAG put out a series of presumptive losses. The lowest one of which which was somewhere not very close to what the CBI alleged was a little over 30,000 crores. It was to be the CBI amount was 30,984 crores. The highest which attracted the media attention was 176,000 crores which was like 30 million dollars. It attracted headlines. It was one of the world's biggest scams if not the biggest scam etc. etc. etc. etc. But wait. Mr. Raja eventually was in jail. He was spent 15 months behind bars. Kanimoi almost six months she spent behind bars. What was Vinod Rai's fault that he said this is a presumptive loss? What is a presumptive loss? A loss that is presumed. It is a notional loss. Money this that could have come to the government but did not come to the government. So he became the villain of the peace and he's still being made to be the villain of the peace. But what is exactly a presumptive loss? It's a notional loss. Yes, Mr. Kapil Sibble was the then minister. He's right. It's a zero loss. Of course there's zero loss but this is money that could have come but did not come. Now why was Mr. Vinod Rai's position subsequently vindicated? After 2010 there have been no less than six rounds of auction of telecommunications spectrum and the government has received commitments for 356,000 crore worth of funds in this period. So then Mr. Vinod Rai is right. Maybe you don't agree with 176,000 crore but certainly the government lost a lot of money. The argument that you're saying that if you hadn't given spectrum at a lower price then you wouldn't have been able to give telecom services at a throw away price to everybody. Again a fallacious argument. You cancel 122 licenses. You re-auction them. Despite all that your prices continue to come down. Exactly and they still have been coming down. So this had absolutely nothing with Mr. Raija's logic of giving away spectrum for a song, for inducting outsiders so to say people who had no connection with telecom ostensibly to break a cartel. All of these arguments are completely fallacious. But it's also interesting that if we want to keep prices low there could be an argument because we did not know what was going to happen in the future. There is an argument that we could argue that could be advanced and Raija was right keeping the spectrum prices low. Which case? Lock it become important because what otherwise you're doing. Then don't allow them to sell the shares? Otherwise what you're doing is instead of a public auction you're doing a private auction. Which is precisely what you're doing. Which not the government benefits but who benefits the private players who've got the license. And it's also very interesting. These are all the players who are also being benefitted by the current administration. If you take Ruiya's SR. That's correct. That's other other case. That's correct. Ravi Khan Ruiya and Shuman Ruiya. They were also given a clean chit. They were also given a clean chit and that's the other case which is also there. And Mr. Anilam Mani. You talked about the equity that was supposed to be there. Now the law or the regulation which is there in this case or this is section 8 or some such thing in the license terms and conditions. That says 10% equity. But the next sentence also says that existing players should not have a stake in the company. And it is very clear that if you take both these together that you could argue the reliance literally owned STL. Sworn Telecom Private MSTPL. It actually held Sworn Telecom. You could argue that essentially it was a reliance front. There is enough evidence to indicate that except that the letter of the law and the spirit of the law. The fine print of the law and the fact that you deliberately kept these loopholes. Now the promoters of Sworn Telecom Private Limited include Mr. Shahid Usman Balwa and Mr. Vinod Goenka. Their contribution to the equity of Sworn was 98 crore rupees. Reliance communication, this contribution is 1,003 crores. But this is disguised because 992 crores has come not as equity shares but as preference shares. And as we had discussed earlier convoluted Sworn Parrot, Zebra, Cheetah, Lion. One company owns 50%. Company A owns 50% of company B. Company B owns 50% of company C. Company C owns 50% of company A. None of them claim to be controlling or owning each other. But wait it didn't stop them. Now we had Asif Balwa related to Shahid Usman Balwa and another gentleman by the name of Rajiv Agarwal who control a company called Kusegao Fruits and Vegetables. Through this indirectly you get 214 crore coming to Kalyanath TV. Who owns Kalyanath TV? Well it is Daalu Ammal is the principal owner, one of the principal owners. She happens to be the stepmother of Kanimoi. Kanimoi herself used to be a major shareholder. She was also a director for a short period of time. Sharath Kumar is a director. Kalyanath TV is affiliated with the DMK. Mr. Raja is a member of parliament belonging to the DMK as is Ms. Kanimoi. And for Justice Sani, this is not evidence. This is not smoking gun evidence. He says that the prosecution did not insist on asking witnesses whether this money was illegal gratification. I think I regret to say this but the honourable judge Justice Sani's logic seems a little strained. I find it very very difficult that he may be right in saying the CBI didn't do its job as well that the prosecutor Mr. Anand Grover didn't do his job as well. And I knew Lalith who is now the supreme court judge because he was the prosecutor of the first phase, particularly the SWAT telecoms, STPL case. He was basically the prosecutor and the main prosecution had been completed by 2014 when he became the supreme court judge and led lay down his prosecution. But when you say the point to note Praveer is that you know you are trying to establish a quid pro quo. You take Raja's statement as phase value Mr. Raja says you know yes I was an MP of the DMK but I didn't know who my leader's wife's company has got money from. He says okay the licenses were issued on so this money came one and a half years later. So what? You know all I'm trying to say it's becomes incredulous the kind of logic that honorable judge OP Saini is used to give Mr. Raja a clean shit and Kani Mohi a clean shit. It's very very difficult in most economic offenses to establish quid pro quo. Here was something that came it has come in my opinion very very close to that. What was this company which is dealing with fruits and vegetables suddenly investing in a television company in Chennai which is controlled by DMK functionaries and is it coincidental that the people who are controlling this fruits and vegetables company happens to be related to a real estate company which has got a license which in turn is being supported by Anil Ambani who suffers from an amnesia because he doesn't remember all the names of the companies whose you know balance sheets and accounts he signed in. I think it's all rather convenient and I regret to say there is much much more to this that beats the eye. Well honestly we must also acknowledge that Justice Saini is held to be an honorable judge and we really do not seem to find what is the logic with which he blames everybody else as you have said all the officials who tried to stop this policy are castigated in different parts of the judgment. But the ones who led to the loss and there is no question as you yourself pointed out the auction led to huge accretion of money to the extricate by virtue of the license license and spectrum being sold and this loss which is now not a presumptive loss but a loss that can be seen all of this is not considered as something for which Mr. Rajesh should be held accountable even if Mr. Saini finds honorable justice Saini finds that he's not criminally accountable and even if the CBI has done a lousy job in prosecution that doesn't make the honorable judge Saini's judgment a good one. You know I'm looking through the chart sheet I'm looking for the evidence honestly speaking when you said what you just did that it is very difficult in economic offenses to find smoking gun in which people openly say yeah we have done this thing or that thing I think this case the CBI what it submitted this was being monitored with the Supreme Court the chart sheet was actually quote unquote vetted by the Supreme Court. That's right there are 80,000 pages if you look at all the chart sheets that have been put in put together by the CBI. And the evidence put together correct the first first information report came on the 21st of October 2009 that time it didn't mention names it was unknown officers of the DFT then it issues notices against Mr. Raja on the 13th of September 2010 by which time after that you know he has to put in his papers then he's arrested I mean I find that this attempt by Judge Saini and he's saying you know I was sitting in court for so many months and nobody came to me with evidence I regret to say this is the judge asking for sympathy this is the judge asking for sympathy but those who are aware of the details of the case those who will take the trouble of looking through the fine print I have no hesitation with all due respect to Judge Saini to describe his judgment as highly flawed. Thank you for enjoying being with us deciphering some of the legal notes that we seem to have now been tied into and this is now going to end here because I think the government will have to appeal we also have to see the legal cases that are going to be filed against the government also there are tribunals international tribunals on which India can be held accountable all of this is now going to tie India up in big knots internationally as well as domestically on in terms of the cancellation of the licenses themselves so I think we need to follow this up as as the things unfold this is certainly not the end of the 2g yes we have been talking about this 2g scam now for quite a few years now now probir I mean I think it's been at least about about seven or seven years or so I think we have we'll probably need to have some more conversations in the future yes I think this is going to continue and for quite some time this is all the time we have for news click today do keep watching news click visit our web page our youtube channel and also follow us on other on the platforms