2G Spectrum allocation case: Delhi HC admits CBI's appeal against acquittal of A Raja, Kanimozhi, others

CHENNAI: The Delhi High Court on Friday admitted the appeal of the Central Bureau of Investigation (CBI) against the acquittal of former telecom minister A Raja, DMK leader Kanimozhi, businessman, and then government officials in the 2G spectrum allocation case. All the accused were acquitted by a special court in December 2017. The CBI challenged the order of the special court before the High Court in 2018.

Justice Dinesh Kumar Sharma admitted an appeal moved by the CBI after allowing their leave to appeal. Justice Sharma said that, from a prima facie view, matters need re-examination. The evidence in the matter required deeper consideration.

"Leave to appeal is allowed and an appeal is admitted as an appeal for hearing," Justice Sharma said. The matter has been listed on May 28 for a hearing. A detailed order of judgement is awaited.

The trial court had acquitted former telecom minister Andimuthu Raja, Siddhartha Behura, the then secretary of Telecom, RK Chandolia, the then PS to A Raja, Shahid Usman Balwa, the then MD of Telecom, Vinod Goenka, the then director of Swan Telecom, Sanjay Chandra, the then MD of Unitech, Gautam Joshi, the then group MD, Reliance ADA (Anil Dhirubhai Ambani), Surendra Pipara, the then group president of Reliance ADA, Hari Nair, senior vice president, Reliance ADA group and Reliance Telecom, Kanimozhi, daughter of Karunanidhi, Sharad Kumar. the then MD of Kalaignar TV, Rajeev Agarwal, the then director of Kusegaon Fruits, Karim Murani, promoter of Cineyug Films, Ravi Ruia, vice chairman Essar (only charged with cheating and criminal conspiracy), and Dayalu Ammal (named as an accused only by ED in money laundering case) The CBI registered a case on October 21, 2009, related to the allotment of a letter of intent, Unified Access Services (UAS) licenses and 2G spectrum by the Department of Telecommunication.

It was alleged by the CBI that in May 2007, after A Raja took over as telecom minister, there was a hike in UAS license applications. Siddhartha Behura and RK Chandolia were known to him from his previous stint in the Environment Ministry. Behura became telecom secretary in January 2008. In November 2007, the Ministry of Finance strongly recommended that there should be a revision of the spectrum fee. Despite the recommendation, the new pan India 2G UAS was kept at Rs 1658 crore, a price at which the mobile telephone services were awarded after auction in 2001. Licenses were issued on a first-come, first-served basis without any competitive bidding.

It was also alleged that rules were flouted to benefit Unitech and Swan Telecom. On September 24, 2007, Raja's PS Chandolia inquired from DoT officials whether Unitech had applied for the license. If yes, not to accept any more applications. On the same day, DoT issued a press release, which published in all newspapers the next day, informing the public that the public that the cut-off date for new application for UAS licenses is October 1, 2007

However, in reality, applications were accepted only until September 25 (Unitech and Swan applications were accepted). It was contended by the agency that this was against the recommendation of TRAI, which had said that there should not be any cap on the number of access service providers in any service area. The CBI investigation revealed that A Raja refused to review the availability of spectrum circles despite being advised by the DoT. He was also accused of ignoring TRAI recommendation that license be given only if spectrum is available

The agency had also alleged that the then-PM was kept in the dark. The CBI in the chargesheet said that on November 2, 2007, the then PM, Manmohan Singh, red-flagged the auction. He wrote a letter to A Raja informing him that the spectrum is limited and the ministry shouldn't process a large number of applicants for fresh licenses. However, A Raja, in a letter to the PM, brushed aside the view of the law ministry that an EGOM (Empowered Group of Ministers) be set up to sort out the issue, the CBI alleged.

It was also alleged that in the letter to PM, A Raja said the opinion of the law ministry is "out of context.". He was also accused of lying to DoT officials, saying the then-SG Ghulam E Vahanvati had given consent to the amended draft. It was further said that Swan Telecom, after getting the license, paid DoT Rs 1537 crore for the UAS license of 13 circles and even without rolling out any service, offloaded its 45 percent equity to UAE-based Etisalat for Rs 4200 crore.

Similarly, Unitech Wireless paid DoT Rs 1658 crore for 22 circles and offloaded its 60 percent equity to Norway-based Telenor for Rs 6100 crore, the charge sheet stated. The CBI's investigation further revealed that top officials of Reliance ADA arranged funds for Swan from Reliance Telecom. The idea was to apply for UAS licenses in 13 circles where Reliance Industries had no spectrum. Investigations of Swan's finances revealed that 90.1 percent of its share was held by Tiger Trustees, a company owned by Reliance ADA Group.

It is alleged that the real estate firm of Shahid Balwa, DB Realty, paid Rs 200 crore to Kalaignar TV through Kusegoan Fruits and Vegetables (DB Group) and Karim Murani's Cineyug Films (49 percent equity of DB Group). Since Kanimozhi was on the board of directors of Kalaignar TV, he was also charged. The investigation agency CBI claimed that the total loss to the exchequer because of the 2G scam stands at Rs 30,984.56 crore (loss due to revenue deficit of Rs 22,535.6 crore and license fee loss of Rs 8,448.95 crore).

In November 2010, CAG estimated the loss at Rs 1.76 lakh crore. In February 2012, the apex court cancelled the 2G licenses of all 122 circles and the government was forced to auction the spectrum at a much higher price. The CBI had filed the second supplementary chargesheet in the case against Essar and Loop Telecom. Ravi Ruia and Anushman Ruia were also charged.

ED had lodged a case and Karunanidhi's wife, Dayalu Ammal, was made an accused. In April 2014, ED filed the chargesheet against ten accused, including A Raja, Kanimozhi and Dayalu Ammal.

(This is a PTI feed)