|End game in telecom|
|Wednesday, 30 March 2011 00:00|
After nearly three years of inaction, the end-game in the Raja scam may come a lot faster than most expected, and is likely to take down a lot more persons than just A Raja. According to what the CBI said in the Supreme Court on Tuesday, two of the big beneficiary companies, Swan Telecom and Loop Telecom, are allegedly fronts for the Anil Ambani’s RComm and the Ruias’ Essar. While the chargesheet—the first to be filed on April 2 and a subsequent one on April 25—will need to be backed with evidence in the trial court, what is surprising is that the government did not act on such charges until now. As long ago as November 2010, the CAG report pointed out that R1,002 crore of Swan’s R1,100 crore equity had been contributed by the Anil Ambani Group—yet, when the matter was referred to the corporate affairs ministry some months ago, it gave Swan a clean chit, arguing that preference share capital (R992 crore from ADAG came in this manner) could not be considered as equity. More important, the then Solicitor General (who is now the Attorney General) had also given an opinion saying much the same thing. So if Swan and Loop are to be charged with cheating and criminal conspiracy, as the CBI said in court, it won’t just be the officials of these companies who will be in trouble—other government officials as well as other telecom companies will also have a lot of explanations to give.
All of this will put the government in an even more untenable position since, despite Raja’s arrest, the official line continues to be that no loss of revenue was caused by A Raja. The position is a complicated one and is based on the argument the Trai never recommended auctions of the 2G licences. Apart from the fact that the then Trai chief denied this was true—this has been reiterated by the Trai under its new chairman recently—it is difficult to appreciate the nuance. It is also difficult to appreciate why the government is taking so long to cancel 122 licences to new firms, and why it has not even moved on the dual-technology licences. And now if the CBI says the two companies were fronts, the fact that other government agencies that were not connected with Raja also went along makes things quite different. While this is enough to throw the industry into a tizzy, all eyes will be on whether the CBI probe goes into more money trails than the ones already disclosed, that money from telecom firms flowed into companies owned by DMK MPs. A Raja may not have revolutionised India’s telecom in the manner he said he would, but the Raja scam has revolutionised the manner in which business will be done in India, and not just in telecom.