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)