Bhupesh Bhandari: Did Unitech really do that?

Sanjay Chandra of Unitech finds himself in the middle of the unending 2G scam, this time for his alleged conversation with public prosecutor A K Singh. In the tapes, Mr Singh can be heard tutoring Mr Chandra on how to counter the star witness of the Central Bureau of Investigation (CBI), Avdesh Kumar Srivastava. The CBI had relied heavily on Mr Srivastava’s testimony. What exactly did Mr Srivastava, then deputy director general (access service) in the department of telecommunications, or DoT, tell the CBI?

There was a huge rush of applications for a telecom licence (and the spectrum that came free with it) in August and September 2007. Telecom Minister A Raja’s office was taking stock of the situation every day. This information, Mr Srivastava told the CBI, was being given to R K Chandolia, Mr Raja’s personal secretary, over the telephone regularly. On the morning of September 24, 2007, Mr Chandolia asked if the applications of the Unitech group had been received. Mr Srivastava checked and told Mr Chandolia that although 167 applications had been received till that time, the Unitech group’s applications weren’t among them. Mr Chandolia said the applications would come during the day, and suggested to Mr Srivastava that no new application should be entertained after the next day, September 25, 2007.
 

Mr Srivastava said it would be unfair to close the window without prior notice. He was then asked to start a file on the issue. In that, Mr Srivastava said that 167 applications (from 12 companies for 22 circles) had already poured in and it may soon become difficult to process so many applications. So, there ought to be a cut-off date, after reasonable time had been given to all prospective applicants. Mr Srivastava said 15 days’ notice was good enough and opined that October 10, 2007, should be the cut-off. The file was sent to Mr Raja. Later in the day, Mr Chandolia again called Mr Srivastava to enquire if the Unitech group’s applications were in. Mr Srivastava checked and informed Mr Chandolia that the applications had now been received. Soon thereafter, Mr Srivastava got the file back where Mr Raja had written: “In view of the large number of applications pending, and to discourage speculative players, we may close receiving applications on October 1, 2007.” Mr Srivastava put out a press release to this effect, which received coverage in the newspapers of September 25, 2007.

This announcement signalled to prospective applicants that the telecom window would not stay open forever, which led to a further spurt in applications. In the eight days after the announcement, no fewer than 408 applications poured in. This brought the total to 575. There was a further twist to it. On November 2, 2007, DoT decided that only those applications would be taken up that were received up to September 25 “in order to avoid legal implications”. This second cut-off brought down the number of applications down from 575 to 232. But the decision was put in the public domain through a press release only on January 10, 2008.

That’s not all. On January 10, 2008, when letters of approval and rejection were handed out to 14 applicants, Mr Srivastava said he was told by Mr Chandolia to distribute them through four counters. Mr Chandolia, he said, “suggested the scheme of the counters which he had on a piece of paper in his hand.” Mr Srivastava said that he couldn’t see any logic in the proposal to set up four counters. If these had to be handed out simultaneously, 14 counters were required; if these were to be given on the first-come, first-served basis, then only one counter was required. Telecom Secretary Siddharth Behura said he was ready to give his assent to the scheme on file. The CBI alleged that Unitech, though it was 12th on the list, was placed third on the fourth counter, behind Spice and Parsvnath. Since Parsvnath only had to collect a rejection letter, that made Unitech effectively second in the queue on that counter. This is important: whoever completed the documentation first on that day naturally got ahead on the queue for spectrum. Unitech, the CBI alleged, had prior information that this would happen and had therefore kept its demand drafts (for the licence fees) ready by October 10, 2007.

Unitech had its demand draft ready in advance, Mr Chandra’s lawyers argued in court, because the licence guidelines said that the letter of intent would be issued within 30 days of application. In fact, they argued, Unitech lost more than Rs 50 crore in interest in the process. If it really had insider information, it would have got the draft made at the last moment. Also, others like Idea Cellular, Datacom and S Tel were also ready with their drafts; still, they were not prosecuted. Moreover, at least two more companies applied on September 25, the cut-off date. One of them, Sistema Shyam, even got the licences for all the 23 circles it had applied for. Mr Chandra’s counsel said that this fact was deliberately suppressed by the CBI. Also, if Mr Chandra had conspired with Mr Raja, Unitech wouldn’t have been denied spectrum in Delhi and 28 key districts in four circles.

There is now speculation that the CBI may move the courts to cancel Mr Chandra’s bail. It is interesting to note that on August 29, 2011, the CBI had told the special CBI judge, O P Saini, it had nothing to show there was a quid pro quo for favouring Unitech. “We are conscious that so far as Unitech is concerned, we have found nothing to show any money trail against it,” special public prosecutor U U Lalit had said.