Tapping, trapping and Telecom Scam

The recent IPL controversy and the subsequent resignation by former Union Minister of State for External Affairs Shashi Tharoor has exposed the double standards of the UPA Government. While Tharoor was made to resign over allegations of committing financial impropriety, no action has been taken against the architect of one of the biggest scams in the Indian history.

Despite mounting evidence against Telecom Minister A Raja about his controversial role in allocation of 2G spectrum to firms at a price much below the market price, the UPA government appears to be shielding him. Raja’s decision to grant new licenses resulted in a loss of around Rs 60,000 crores to the national exchequer.

The Central Vigilance Commission (CVC) issued a showcause notice to Raja in November 2008. It also demanded his prosecution in the case. Following this, the Central Bureau of Investigation (CBI) registered an FIR on October 21, 2009 under various sections of the Prevention of Corruption Act. The agency is investigating allegations into criminal conspiracy between certain public servants and private individuals in granting of these licenses in 2007-2008.

The role of certain middlemen, including Nira Radia, who according to the CBI were actively involved in this criminal conspiracy, came under the scanner of the agency. As a part of the investigation the agency sought information from the Directorate General of Income Tax about the middlemen, including Radia, an influential lobbyist who runs an communications consulting firm called Vaishnavi Communications. She also runs Noesis Consulting, Vitcom and Neucom Consulting. Noesis comprises of retired bureaucrats and is involved in consulting in various sectors like Telecom, Power, Aviation, and Infrastructure.

The phones of Nira Radia and her associates were placed under surveillance by the Finance and Home Ministry for a period of 120 days in 2008 and 180 days in 2009. The intercepted calls pointed towards collusion between Radia, certain officials of the Telecom Ministry, and some telecom operators. It also suggests that a large number of confidential documents and policy papers found its way to Radia.

Documents available with Canary Trap reveal that CBI DIG Vineet Agarwal had sought call detail records  of Nira Radia and some other middlemen from Directorate General of Income Tax through a letter on November 16, 2009. The details that emerged from that call records are simply shocking.

1. The telecom intercepts suggest that Radia had a role in managing policy changes at the highest levels of government, including those leading to the award to telecom license to Unitech Wireless, Swan Telecom, Aircel, and Datacom.

  • Swan Telecom Pvt. Ltd. bagged an allotment of licenses in 13 circles worth Rs 1537 crore. Within weeks of bagging the licenses, the company sold 45 percent stake to Etisalat (UAE company) for Rs 4500 crore.
  • Unitech got licenses for 22 circles for Rs 1651 crore. It later sold them to a Telenor (Norwegian company) at a whopping sum of Rs 6120 crore. Unitech had applied for licenses in several names (Unitech Infrastructure, Unitech Builders and Estates, Aska Projects, Naham Properties, Hudson Properties, Volga Properties, Adonis Projects and Azare Properties among them). They merged all their licenses when Raja signed a dubious notification allowing this to happen. This paved the way for a foreign firm, widely operating in Pakistan and Bangladesh, to enter the Indian telecom industry. This clearly exposes UPA government’s lax attitude towards national security.

2. Some conversations suggest that Telecom Minister A Raja and Radia too have equity interest in Swan Telecom.

3. The intercepted calls also exposed the extent of lobbying done for ministerial berths and the helplessness of none other than the Prime Minister in preventing corrupt people from occupying high offices. The recorded conversations reveals that a top businessman, with interests in various sectors besides telecom, wanted to prevent Dayanidhi Maran from becoming the Telecom Minister. Whereas, another top businessman with primary interest in telecom, was lobbying to prevent Raja from becoming the Telecom Minister.

  • Given Raja’s dubious record, it seemed unlikely that the PM would have accommodated him in his cabinet again after winning the 2009 Lok Sabha polls. But Raja not only made it to the cabinet, he also got the Telecom Ministry. According to some conversations, two top news editors (one a Padma Sri awardee, and another who also does lifestyle TV shows) lobbied with the Congress leaders on behalf of Radia to get ministerial berths for DMK MPs, especially Raja.

4. Another conversation between Radia and Unitech’s Ajay Chandra relates to the sale of equity by United to Telenor as a higher price, thus making huge profits. The discussion is about the government’s investigation into the telecom license issue. According to an internal investigation report, the crux of the conversation is to stagger the inflow of funds and to give an impression to the government that the funds have come only into the telecom company and there is no windfall gain to the promoters of Unitech.

5. The phone tapping exercise also revealed that Radia is spreading business connections to Africa, including investments in Guinea and Senegal through Global Minerals.

6. The conversations of Radia and her associates also suggest their role in laundering and structured payoffs, and liaisoning for telecom and power projects.

The CBI inquiry so far has put the government on the back foot. As a result, the man who was leading the investigations into the scam was transferred. So, is the removal of Vineet Agarwal a part of the government’s efforts to bury the inconvenient facts that has emerged from the inquiry till now?

CBDT reacts on phone tapping

Meanwhile, the Central Board of Direct Taxes (CBDT) has issued a clarification on interception of telephonic conversations of the above mentioned individuals. Take a look:

“A section of the media has reported communication between the Income Tax department and the Central Bureau of Investigation regarding records of telephonic conversations between a person by the name of Nira Radia and others. It is also reported, citing sources in the CBI, that in addition to Radia, telephone lines of several other influential business-men, politicians and advertising professionals were tapped.

The Central Board of Direct Taxes (CBDT) has clarified that the Income Tax department has not recorded any telephone conversation of influential businessmen, politicians and advertising professionals as alleged.

It is further clarified that the Income Tax department does not intercept telephonic conversations except as authorised under the law. The provision is used in rare and exceptional cases of suspected tax fraud / evasion involving security of the state. The procedure, as prescribed under the law, is strictly followed in all such cases.” (BY/KP/GN-150/10 – April 28, 2010)

9 thoughts on “Tapping, trapping and Telecom Scam

  1. This is the classic definition of crony capitalism masquerading as a free market economy…

    1) It is imperative that lobbying be brought above the ground in India. The fact that lobbyists are underground, along with the inherent corruption of those in power (including the media), allows such scams to occur and go down without much public furore.

    2) Indian citizens may have access to the RTI and the internet and all the information that it offers, but we have a culture of information suppression in our country when it comes to serious issues like such inquiries.

    3) Institutions are so terribly rotten in our country due to political interference. I wonder why the hell don't large media houses run candle light vigils and marathons for freeing the CBI and the police from political interference.

    4) National security needs to taken more seriously, particularly with regard to things like telecommunications. They can stop prepaid cards in J&K, but don't seem to bother about foreign firms and the potential for danger there. There is nothing inherently wrong with that firm coming to India, but when everything is so well hidden under the carpet, God knows if they will even inquire about any malpractice.

  2. I truely appreciate all the hard work done by the canary trap to come up with such an informative and interesting write-up. However, I would like to say that UPA, BJP or anyone, at the end of the day the fact remains that all these people are out there to serve themselves. In the Tharoor controversy, nobody felt any need to inform people about what was happening. No goverment feels accountable to people. Same happened with Telecom scam and will continue happening. Like what happended during worst terror strikes, people move on for they have no choice and the world stands up to appreciate the ‘spirit’ for the city.

  3. Very true..! The sheer truth behind white drags.
    This writeup/news actually exposes the color blindness of government. I have not voted since i got the voting card bcuz of certain mental restrictions which are due to overinformed conversations with certain influential people.

    At a point of time when i was crossing teenage, i wanted to actively go in politics(being from freedom fighters family) but now i am afraid. I dont want to be part of that system. The ”TAMRA PATRA” hanging in my house seems vague.

    Hell is better than this political gamut. Ha..!!

    Shashi was educated and could not survive defaulters. Be an Indian in India..be an amrikan in amrika..!! Alas India..!!!!

    Well..i thought IT has less politics but yes, every field is influenced by indian politics.. 🙂

  4. The entire system is rotten. A lot of top bureaucrats are joining the corporate houses as lobbyists to influence the policy decisions. Even a former Army Chief has joined the board of a big corporate house. And now a retired Governor has joined a corporate house. Take it from me, the day is not far when even the Prime Minister of the country, after retiring, will join a corporate house to lobby for them.

  5. This is such a great resource that you are providing and you give it away for free. I enjoy seeing websites that understand the value of providing a prime resource for free. I truly loved reading your post. Thanks!

  6. India is Constantly " BLEEDING " by 2 side of Attack. Merciless KILLING SPREE by Terrorists & LOOTING SPREE by some Corrupted Politicians. One Side would never be stopped and Another side would never go. Could we aspect Kasab's Judgement " DEATH PENALTY " for both side? Why not to put Corrupted Politicians, Traitors and Terrorists in same category? Unnecessary Powers to Useless Politicians is more Hazardous than Terrorists. Parliament only wakes up when Media breaks any story on Scams, and the left over Idiots would Strom & Adjourn Rajya Sabhas and Lok Sabha to prove them more Patriotic on the loss of Public Money. RAJA / RADIA Nexus exposed by India Today Group is the Perfect Combination of POLITICAL PIMP & CORRUPTED POLITICIAN, who makes Ministry a " HORE HOUSE " and Compromises with Clean Chits. Is every Portfolios in all Ministry for SALE under Table or Auctioned like IPL Players by POLITICAL PIMPS to form Govt? DEMOCRACY IS ON THE ROCK BOTTOM STAGE IN UPA's 2nd PHASE.

  7. Hats-off to the brains behind the Canary Trap. The Vohra (Committee) Report, submitted by the former Indian Union Home Secretary, N.N. Vohra, in October 1993, studied the problem of the criminalisation of politics and of the nexus among criminals, politicians and bureaucrats in India. Canary Trap is unveiling the maligned role of another important group within that nexus i.e. "Top Businessmen". All sensible Indians must put their weight behind such initiatives to "make the influential; responsible." This ruthless exploitation of India in the hands of self-perpetuating politicians and businessmen must be put under check. Especially, Media must not become a puppet of such corrupt forces. I wish Canary Trap to be the flag-bearer. All the best.

  8. The biggest thing is that in India the Media hs become the most corrupt . In other countries Medis is one unit where people have trust but the news of some top news chnannel editors were instrumntal in lobbying for Raja to become Telecom ministers shows what Medis is in india as of now. Thanks to websites like Canary Trap one still can get unbiased news – otherwise all other channels like CNN-IBN, NDTV & newspapers like TOI, HT are tools in hands of politicians , specially congress

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