Congress faces heat in Aircel-Maxis deal probe
The CBI chargesheet against the Maran brothers along with others in the 2G spectrum scam has put the Congress on the defensive once again. The chargesheet says that the “circumstances” of the FIPB approval granted by then finance minister P Chidambaram to Global Communication Services is being investigated by the CBI. Here is an explanation […]
The CBI chargesheet against the Maran brothers along with others in the 2G spectrum scam has put the Congress on the defensive once again. The chargesheet says that the “circumstances” of the FIPB approval granted by then finance minister P Chidambaram to Global Communication Services is being investigated by the CBI. Here is an explanation of what the controversy is all about:
What is the Aircel-Maxis deal controversy?
The deal dates back to December 2005 between Maxis, a Malaysian company owned by T Ananda Krishnan — a Malaysian citizen of Sri Lankan-Tamil origin — and Aircel, promoted by Chennai-based C Sivasankaran. Maxis Communications and Sindya Securities and Investment Pvt Ltd, promoted by Suneetha Reddy and husband P Dwarakanath Reddy, took over Aircel, with Maxis acquiring 74 per cent shares. The company, subsequently, got a licence in December 2006 for telecom circles during Dayanidhi Maran’s term as telecom minister (2004-2007).
The controversy erupted after the 2G spectrum allocation scam surfaced in 2010. In wake of the scam, the Supreme Court asked the CBI to probe then telecom minister A Raja’s predecessors. Maran, the textiles minister in UPA-II, had to resign from the Cabinet in July 2011 following the allegations of his involvement in the scam.
A month earlier, Sivasankaran complained to the CBI that he was “arm-twisted” by Maran to sell his Aircel stake to Maxis. The CBI, in October 2011, registered a case against Dayanidhi and his brother Kalanithi Maran, along with executives of Maxis and four other companies, alleging quid pro quo to the Maran brothers.
What does the CBI chargesheet say?
In August 2014, the CBI filed a chargesheet in a special court against the Maran brothers and six others, including the four companies. The specific allegation was that Maran and his family had received a bribe for coercing Sivasankaran to sell Aircel to Maxis. The chargesheet says that a bribe of Rs 549 crore was paid by Maxis in return for the favours through its subsidiary Astro All Asia Network, which invested a total of Rs 629 crore in Kalanithi Maran-owned Sun Direct Pvt Ltd.
The investment was made through purchase of shares of Sun Direct Pvt Ltd by South Asia Entertainment Holdings Ltd, a Mauritius-based subsidiary of Astro Asia, at a premium of Rs 69.57.
Further, the CBI has said that a sum of Rs 193 crore was paid to Chennai-based South Asia FM Ltd, owned by the Maran family, through its Mauritius-based subsidiaries.
The chargesheet has alleged that Maran abused his official position as the telecom minister to “constrict” the business environment for Aircel with the intention of forcing its exit from the telecom business and its sale to Maxis.
What is the latest controversy surrounding the deal?
The CBI in its chargesheet has said it is investigating the “circumstances” of the Foreign Investment Promotion Board (FIPB) approval granted by then finance minister P Chidambaram to Global Communication Services Holdings Ltd, a subsidiary of Maxis, for investing $800 million in Aircel Ltd in 2006.
According to the CBI, the Cabinet Committee on Economic Affairs was the “competent” authority to grant approval for the investment, something that was allegedly not obtained while the finance minister was “competent” to grant approval for investments only up to Rs 600 crore.
However, Chidambaram has refuted the claims, saying that the FIPB had sought his approval in the case in accordance with the rules.
In 2012, BJP leader Subramanian Swamy had allegedly revealed financial transactions between companies controlled by Chidambaram’s son Karti. Swamy had alleged that Karti owned more than 94 per cent shares in a company Ausbridge Holdings and Investments Pvt Ltd,which owned 67 per cent shares in Advantage Strategic Consulting Pvt Ltd.
He alleged that before March 31, 2006, it had given Rs 26 lakh as loans and advances to Aircel, around the time of the FIPB approval by the finance minister. The loan, he alleged, was a payment made to acquire 5 per cent shares in Aircel.
Chidambaram, he further alleged, delayed the FIPB clearance till his son received shares in the company.
What was the UPA-II’s defence in 2012?
The allegations by Swamy had led to a furore in Parliament, following which the UPA-II issued two statements — on April 28 and May 8. Refuting the allegations of “delay”, the government came out with the timeline of approval given to Global Communication detailing how the company acquired 26 per cent equity in Aircel through the automatic route and then applied for enhancing it to 73.99 per cent.
In May it made another statement, saying that another application was received for downstream investment by Global Communications on September 6 to acquire 73.99 per cent equity in Aircel while at the FIPB meeting on October 3, it was recommended. On October 6, the minutes of FIPB were drawn and moved while on October 12, 2006, the finance minister approved them. On October 20 the letter of approval was issued.
On being cornered by the BJP, Chidambaram, clarifying in Parliament, had read out a statement by Karti that said, “I categorically state that neither me nor any member of my family have acquired or hold any stake in any telecom company. In particular, I categorically state that neither I nor any member of my family have acquired or hold any share in either Aircel or Maxis”.
Chidambaram had also made an emotional appeal saying, “It would be much simpler if somebody took a dagger and plunged it into my heart than questioning my integrity”.
Share
