So the Central Bureau of Investigation or CBI has said that it does not have any evidence of a money trail between Sanjay Chandra of Unitech and former telecom minister A Raja to suggest a quid pro quo. Mr Chandra and Mr Raja are in jail over the so-called 2G spectrum scam. Unitech conspired with Mr Raja, the allegation goes, to get telecom licences (and inexpensive spectrum) ahead of others, and then made pots of money by selling a majority stake to Telenor of Norway — the money that should have accrued to the government was fraudulently pocketed by Mr Chandra. But now, after CBI’s confession, the conspiracy theory looks shaky.
The lawyers of Mr Chandra, and those of Shahid Balwa of Etisalat DB, have been shouting from the rooftops that they did not sell a single share in their venture — what they sold was fresh equity to overseas partners, which results in the money flowing into the company and not into their personal coffers. So there was nothing for them to gain from “trading in spectrum”.
A few other things also don’t quite add up. One, CBI has yet to file its third and final charge sheet on the issue; it now says that it will do so by September 15, after having missed earlier deadlines. As a result, trial has begun, even though investigations are going on! Two, one charge sheet names all: Mr Raja, Mr Chandra, Mr Balwa and 14 others. Was there a grand conspiracy hatched by all of them to deny the government what was rightfully its money? There is nothing in the charge sheet to suggest there was collusion between Mr Chandra and Mr Balwa, who are in a sense business rivals.
Also, Mr Raja is in the dock for handing out spectrum cheap to 12 companies (under new licences as well as cross-over licences), which caused the government a serious “loss” of revenue. Why have just two companies, Unitech and Swan (now Etisalat DB), been charge-sheeted for this loss? These two, according to CBI’s calculations, caused only 22 per cent of the loss of Rs 30,984.55 crore to the exchequer. What about the others? Hasn’t it been standard practice in the industry to offload equity to strategic partners at a premium?
In fact, the whole question of the loss to the government because of the spectrum sale looks murky now. The Comptroller and Auditor General (CAG) said in November last year, quoting the assessment of the Telecom Regulatory Authority of India or Trai, that 2G spectrum was really 2.75G spectrum and hence not very different from 3G spectrum, and if the same yardstick as last year’s auction of 3G spectrum is used, the loss could be as high as Rs 1,76,645 crore. This was more than what anyone had imagined in one’s wildest dreams and far ahead of any other scam in size — many times more than Bofors, Satyam and Commonwealth Games put together.
But is that the right thing to do? Didn’t the telecom operators who bought 3G spectrum in the auction overpay? Many of them have acknowledged that the auction drove up the prices, and the revenues that have resulted do not justify those high prices. So, was CAG right to use 3G spectrum prices as the benchmark for calculating the loss in the sale of 2G spectrum?
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There is a further twist to it. In 2008, CBI had said that the loss caused by Mr Raja was of the order of Rs 20,000 crore. It then revised the figure to Rs 30,984.55 crore in its charge sheet filed earlier this year. (The Enforcement Directorate, on its part, has put the loss at Rs 40,000 crore.) CBI also asked Trai to look into the number. It now transpires that Trai has communicated to CBI that it is not possible to arrive at the amount that the government could have got had it chosen to auction the spectrum.
Trai had said, as late as in August 2007, (the Department of Telecommunication under Mr Raja had handed out the licences in January 2008) that auction was not the right way to give out spectrum. An auction, the argument went, would push up the price of spectrum and thus put the newcomers at a disadvantage vis-à-vis the incumbents. This also ran the danger of making telecom services expensive. In no directive or policy paper was it ever mentioned that the government should use 2G spectrum to fill its coffers.
It is a matter of record that Prime Minister Manmohan Singh said in Parliament that there was no loss from the sale of 2G spectrum. The point was reiterated by Home Minister P Chidambaram, who was at that time the country’s finance minister, and Telecom Minister Kapil Sibal. So, if there is no loss to the government, and Mr Chandra and Mr Balwa have made no money, what really is under probe? Whose brief does CBI really hold? It’s quite possible that there was some impropriety and irregularity in the award of licences — which must be investigated and those guilty should be brought to book. But that matter is different from all the talk of public loss and private gain.