Spectrum and ‘fabrication’: How CBI got a sharp 2G rap

In a Facebook post, Finance Minister Arun Jaitley has attacked Sibal directly, and asked, “What about the Ministers who conspired to create a fabricated chargesheet, and a retired Judge who, for the sake of a post-retirement assignment, agreed to lend his offices for the same?”

Written by Subhomoy Bhattacharjee | New Delhi | Updated: October 16, 2015 4:33 am
spectrum allocation, spectrum allocation, 2g spectrum, 2g spectrum allocation case, mobile spectrum allocation case, 2g court, shyamal ghosh, airtel, vodafone, bharti airtel, bharti mittal, uninor, india news, news, latest news The Patil committee report, in February 2011, said what the government wanted it hear: “Since 2001, the internal procedures adopted by Department of Telecom have not been in tune with extant policies and directions of Government”.

It will be some time before the guilty of the 2G scam are convicted. But Thursday’s judgment by the 2G special court has cleared the air on who are not to be held guilty. The background against which the CBI’s now-rejected case against a former Telecom Secretary and three companies was filed:

UPA Narrative
The first of former Telecom Minister Kapil Sibal’s two contributions to the 2G spectrum case was the famous zero-loss hypothesis — his rebuttal of the CAG’s calculation of a Rs 1.76 lakh crore loss to the exchequer. The auditor’s report was tabled in Parliament in 2010, and to deflect the opposition’s attack, Sibal came up with his second contribution.

To build a case that Sibal’s predecessor A Raja had only followed precedent dating back to the NDA’s years in power, the government set up the one-man Justice (retd) Shivraj Patil committee to investigate the “deficiencies in the formulation and implementation of internal procedures by the Department of Telecom in the issuance of 2G licences and allocation of spectrum during the period 2001-2009”.

The broad narrative was this: Contrary to media reports, the benefits of the telecom revolution that had contributed to the India story had not been hurt. And the running theme was that of continuity, rather than a break under the UPA government.

The Fallout
The Patil committee report, in February 2011, said what the government wanted it hear: “Since 2001, the internal procedures adopted by Department of Telecom have not been in tune with extant policies and directions of Government”. There was a specific, damaging criticism: “In deviation with said requirements, the Secretary (Telecom)… on 17.11.2003, approved formulation of procedure of accepting the applications for grant of unified service licences by adopting procedures similar to the procedure adopted for grant of basic service licences.”

The Secretary concerned was Shyamal Ghosh, an officer with a sterling record in multiple economic ministries. The committee accused him of favouring some telecom service providers over others, and of allowing companies to get spectrum bundled with licences on a first come, first served basis, whereas the cabinet had approved a multi-stage bidding process or auctions for them. The accusations were eerily similar to those against Raja — bypassing cabinet decisions, and playing favourites.

From there on, it only remained for the Central Bureau of Investigation to build a case detailing the reasons for Ghosh’s alleged dealings with telecom companies Bharti and Vodafone. (In 2003, there was no Vodafone, but two other entities — Hutchison Max and Sterling — which merged into it; the legal liability remained.)

The CBI Case
On January 31, 2002, when Ghosh was Secretary and Pramod Mahajan was Telecom Minister, the two companies were allocated additional spectrum beyond 6.2 Mhz in the prized 900 MW band. CBI said the Minister and Secretary “showed undue haste” in clearing the proposal, bypassing the Member (Finance) in DoT, the Telecom Commission and the Telecom Regulatory Authority of India. It alleged additional spectrum was given with a usage charge of 1% of their adjusted gross revenue instead of 2%. According to the CBI, DoT’s technical committee had recommended giving out additional airwaves beyond 6.2 Mhz only after the operator had reached a subscriber base of 9 lakh, but Ghosh’s department had slashed the requirement to 4 lakh.

By 2012, CBI was already working on the Supreme Court mandated investigation on the allocations made in 2008. Using the same yardstick as the national auditor’s, it argued that the 2002 allotments were mala fide in the light of the success of the 2007 auctions. Using the auction’s estimates, it put the losses under the NDA at Rs 844 crore.

The carrot for the officer, according to the CBI, was the post of USO Fund Administrator. The late Minister had, in May 2002, initiated a note to create the post of Administrator for Ghosh, and sent it to the Prime Minister a day before Ghosh retired as Secretary on May 31. It was approved on the same day, but cleared by the Cabinet Committee on Appointments later.

This case was bundled with the other 2G cases. So, if a valid case was to be made out against Raja, then those against Ghosh and Mahajan would be valid too. In other words, both UPA 2 and NDA governments would have played the same game on the allotment of telecom resources.

What Now?
The court has said the CBI’s argument was “distorted and fabricated”, and “there is no doubt that the chargesheet has been filed for extraneous reasons”. This, and the direction to the agency chief to take action against the “erring officials”, is a severe indictment.

In a Facebook post, Finance Minister Arun Jaitley has attacked Sibal directly, and asked, “What about the Ministers who conspired to create a fabricated chargesheet, and a retired Judge who, for the sake of a post-retirement assignment, agreed to lend his offices for the same?” The political battle is likely to only intensify.

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