Is Ratan Tata's SC petition on 2G tapes a bad strategy?


Watching the Ratan Tata interview with Shekhar Gupta made one wonder as to whether both of them were gullible enough not to understand the significance of the Radia tapes or were they playing to the gallery in the adult version of WWF. One suspects that it was a bit of both with Ratan Tata being more on the gullible side and Shekhar on the WWF side – playing the game.

There are a number of questions that Mr Ratan Tata needs to answer.

The first and foremost relates to the need for the House of Tatas to engage  a  professional lobbyist and media manager instead of having a in-house media department. Obviously lobbyists are a necessity because there are lot of things that a professional lobbyist and media manager can do which the corporate  cannot. And if you are caught with your pants down you can always disown them – as is done invariably – on the ground that the lobbyist exceeded his/her brief. Is that the reason why a lobbyist like Ms Niira Radia was employed?

The second and the more important question relates to the significance of  the fact that  Ms Radia was not acting for the House of Tatas exclusively. She was acting on behalf of any and everybody including herself and surprisingly also the Minister! Did  Mr Tata realize the consequence of the other relationships that Ms Radia had developed?  If Tatas do not share the culture of either Reliance or Unitech, how can they share the same lobbyist?

The fact of the matter is that Radia needed the House of Tatas as much the Tatas needed her. That gave her respectability and credibility to solicit/get solicited by other clients and also to do deals for herself.

Is it not a fact that Tatas were not the innocent victim – as is the case in most scams – of corruption but were the innocent beneficiary of the corruption in the telecom scam. In fact they were the largest beneficiary.

Is it not a fact that in the process of obliging Anil Ambani with a GSM license in exchange for transfer of Swan Telecom, Raja had to give the Tatas too the GSM license at the discounted price of Rs 1650 crores.  Twenty-six percent of the shares of holding company of the Tatas, which got the license, was sold to DOCOMO for $2.7 billion, giving the license a value of $10 billion. The bottom line:  26 percent of what was bought for Rs 1650 crores by the Tatas was sold for over Rs 13,000 crores. This was almost three times the valuation obtained by Swan Telecom or Unitech.. On paper, the House of Tatas benefited the most from the Telecom scam.

Should Ratan Tata, then, be eternally grateful to Ms Radia for making it possible? For any decent human being the answer would be a resounding  “YES”. And Ratan Tata, like the Hon’ble Prime Minister Manmohan Singh, is more than a decent human being.  So while the Hon’ble PM maintains his silence over Raja,  Mr Ratan Tata goes out on a limb to defend Ms Radia.

And yet, Ms Radia had nothing to do with the GSM license given to the Tatas. They were the unintended beneficiaries of the Anil Ambani scam because they were in the same CDMA boat.

Was it possible to have one set of laws for Anil Ambani, in the “give one get one” scam in which license was given to RCom and Swan Telecom, and have another law for not giving a license to Tata Teleservices? In fact Tata Tele applied for the license on 22/10/2007, after Reliance Communication got the license on 18/10/2007. Tatas had to be given the license/spectrum because there could be no discrimination. Otherwise it would go to Court as they actually did for the allotment of the spectrum in the circles where there was scarcity of spectrum.

Where does Ms Radia fit in? Nowhere!

Ms Radia was into her own scam with the Minister. She was dealing for everybody, including herself. Is it not true that money was transferred to Unitech group by the Tatas at the behest of Ms Radia? How much money did she make in helping others make money? Who were the parties who made money because of her? How much money did each one of them make? Did she have any stake in any of the licenses? These are matters of investigation.

The fact of the matter is that Ms Radia  too had a personal stake in Raja retaining the telecom portfolio. And her personal stake was larger than that of the Tatas at the material time.

Unitech too got a license and was reportedly her client. Tata Realty gave a loan of Rs 1700 crore to Unitech in early 2008 at a time when the license was actually given (10/1/2008). Was it to facilitate the license or/and the bribe? Was it not done because of Radia? What if it is discovered that bribes were paid by Unitech? Could not the Tatas be accused of a three way deal, given that Tata Tele benefited the most? And the fact that the loan was never repaid but properties were transferred by Unitech. (Unitech could not return the loan and instead sold subsidiaries having land in Gurgaon to Tata Realty.)

Would it then be unreasonable to conclude that Tatas may not be giving bribes but they need lobbyist like Ms Radia who facilitate bribes?

The facts narrated above are not from the  Radia tapes. These are in the public domain and the conclusions drawn are  logical.

It is for these reasons that Mr Ratan Tata should realize that it is the tapes that will prove his innocence/guilt. So far, the tapes that are in public domain are not damaging to him. If he approaches the Court then people will feel that he has something to hide along the lines suggested above. Like the paradox of the Tatas having benefited the most from corruption, the House of Tatas benefit the most by the tapes remaining in the public domain..

Let there be transparency if there is nothing to hide. Like the judges who voluntarily declared their assets. It is a sting operation or a leak which happens all the time. In fact it is the stuff that lobbyist Ms Radia uses routinely.

Leaking policy papers, influencing policy and even cabinet posts is what the lobbyist do for a living and those engaging them pay for.  If the House of Tatas did not see any wrong in appointing a lobbyist and benefiting from leaked information then why squeal now when the tapes are leaked? What happened to the level playing field?

Ratan Tata would be well advised to sack the lobbyist, withdraw the petition from the Supreme Court and let the tapes remain in the public domain. Otherwise he risks damaging his reputation forever which will be a sad thing. As for the tapes, they will remain in public domain (the Internet is too vast to be covered by a court injunction).

Disclosure: The author believes that the House of Tatas is one of the few honest corporate houses of the country and should not get involved with lobbyists, more so when they also lobby for other companies with dubious reputation. The author holds Ratan Tata in high regard and is a well-wisher. The post has been written in good faith.

(PS: “India is becoming a banana republic,” Ratan Tata said in the interview. The aam aadmi knows that it’s been one for years.)

(Arun Agrawal is the author of the book Reliance: The Real Natwar)