Sunday, November 22, 2009
[The Pioneer, October 28, 2009]
The 2G spectrum scam might not have taken place but for the clout that A Raja wielded in the UPA-I Government, when his party (the DMK) — as a major ally of the Congress — called the shots at the Centre. Documents available with The Pioneer show how the Telecom Minister got away with serious misdemeanour: He flouted Manmohan Singh’s written directions to take the PM’s clearance before acting on the matter; contemptuously dismissed a crucial suggestion by then Law Minister H R Bhardwaj for an EGoM to decide on spectrum licence auctioning; and claimed to have been enlightened (to go ahead in the manner he did) in a deliberation with senior Congress leader Pranab Mukherjee.
Bhardwaj was perhaps the first senior Minister then to smell a rat in Raja’s decision on spectrum allotment. On November 1, 2007, he forcefully advocated that an Empowered Group of Ministers (EGoM) be formed to decide the formalities in allotting the spectrum. Bhardwaj wrote, “In view of the importance of the case (2G spectrum allocation) and various options indicated in the statement of the case, it is necessary that the whole issue is first considered by an Empowered Group of Ministers and, in that process, the legal opinion of A-G (Attorney General) can be obtained.”
The then Union Law Minister was responding to an opinion sought by the Telecom Ministry on going ahead with the allocation of 2G spectrum on first-come-first-served basis and on prices fixed in 2001.
This sensible suggestion did not go down well with Raja. Without wasting time - on the following day, November 2, 2007 — a furious Raja wrote to the Prime Minister and questioned Bhardwaj’s wisdom in asking for setting up an EGoM.
The Telecom Minister’s letter is a classic example of arrogance. He wrote, “The Ministry of Law and Justice, instead of examining the legal tenability of these alternative procedures, suggested referring the matter to EGoM. Since generally new major policy decisions of a department or inter-departmental issues are referred to the GoM, and needless to say that the present issues relate to procedures, the suggestion of the Law Ministry is totally out of context.” (The emphasis is as in the letter.)
Raja also informed the Prime Minister that he wished to advance the cut-off date for the receipt of applications for the spectrum/licence from October 1, 2007, to September 25, 2007.
This was on the morning of November 2, 2007. The same afternoon, the Prime Minister — alerted by Bhardwaj’s noting on the mega scam-in-the-making — wrote back to the Telecom Minister and cautioned him against taking any measures without informing him. This was clearly a directive to freeze all action on 2G spectrum allotment.
“I would request you to give urgent consideration to the issues being raised with a view to ensuring fairness and transparency and let me know of the position before you take any further action in this regard,” the Prime Minister said.
In the two-page letter, Manmohan Singh also objected to Raja’s proposal to go ahead with the first-come-first-served model and cheap pricing. Singh instructed the Minister to adopt “correct pricing of spectrum and revision of entry fee”. The Prime Minister also asked Raja to clarify on the objections raised by TRAI over the first-come-first-served basis and the 2001 pricing for sale in 2008.
The unambiguity appeared lost on the Telecom Minister. Responding to the Prime Minister, Raja offered an evasive reply, though drooping with courtesy. The same evening, he wrote in his second missive to the Prime Minister, “I would like to assure you that all my decisions and endeavours are honestly aimed at the development of the telecom sector….” He then launched into a technical background on the telecom sector in the country. But not one word did he utter on the Prime Minister’s instructions to refrain from taking any decision without informing him (the PM). He also remained silent on the issue of auctioning.
After this flurry of exchanges, Raja suddenly went into a shell. Finally, breaking his silence 50 days after his last note to the Prime Minister, Raja wrote another letter to him on December 26, 2007. Therein, he claimed that he had received consent from the then External Affairs Minister Pranab Mukherjee and the then Solicitor General (currently Attorney General) Goolam Vahanvati to go ahead with the spectrum allocation.
It is here that the Telecom Minister got enlightened. “In these circumstances, the discussions with External Affairs Minister and Solicitor General of India have further enlightened me to take a pre-emptive and pro-active decision on these issues as per the guidelines and rules framed thereunder to avoid any further confusion and delay,” a grateful Raja stated.
It remains a mystery why Raja quoted Mukherjee and Vahanvati as both have no locus standi in allotting the 2G spectrum. The Prime Minister routinely acknowledged the letter on January 3, 2008, but said nothing more. Certainly, he never supported or endorsed Raja’s decisions, as the Telecom Minister is claiming ad nauseum.
Ironically, while Bhardwaj is out of the Cabinet in UPA-II, Raja continues in the Ministry, defending what is increasingly becoming an indefensible position.
[The writer is Special Correspondent of 'The Pioneer' daily]
Sunday, July 26, 2009
The father-son duo that tried to influence a Madras High Court judge through a Union Minister for a favourable verdict in a criminal case was close to Telecom Minister A Raja.
Justice R Reghupathy created a sensation on Monday evening in open court in Chennai when he alleged that a Union Minister had tried to influence him for grant of anticipatory bail to a doctor and his son in a forged marksheet case filed by the CBI. The judge said the Union Minister called him twice for granting anticipatory bail to Krishnamoorthy and son S Kiruba Sridhar, facing a CBI inquiry for malpractices in medical college exams of Pondicherry University.
While the judge did not name the Minister who had tried to put pressure on him, documents available with The Pioneer show Dr C Krishnamoorthy enjoys close proximity with Telecom Minister A Raja.
Krishnamoorthy is a close associate of Raja and belongs to the Minister's hometown, Peramballur. He is the owner of the building which housed a law firm run by Raja before he became a Minister. Krishnamoorthy is also the managing director of a Coimbatore-based real estate company, Kovai Shelters Promotors India Pvt Ltd, formed on January 19, 2007. As per the documents available with the Registrar of Companies, Raja's nephew Dr R Sridhar and nieces R Anandabhuvaneswari and R Santhanalakshmi are directors in this company and jointly hold 45 per cent shares in Kovai Shelters.
The Pioneer had on January 12, 2009, reported that Raja's nephew, a Class-I officer in the Ministry of Environment and Forests, violated the service conduct rules by remaining on the board of a private firm without informing the Government. Sridhar had secured the Government job by providing false experience certificates. Applications for this post were invited during Raja's tenure in the Environment Ministry. The mandatory five-year experience certificate was falsely issued to Sridhar by his research guide Dr L Kannan, who was later elevated as the Vice-Chancellor of Thiruvalluvar University.
Krishnamoorthy also owns a big investment company, AGM Investments Finances Pvt Ltd. This company, formed in September 1990 by one Arun G Mehta in Chennai, was acquired by Krishnamoorthy in February 2008 along with his brother Satyanarayanan.
On Tuesday, Justice Reghupathy spilled the beans when the advocate, appearing for S Kirub Shridhar, a third-year student in a private medical college in Puducherry, and his doctor father Krishnamoorthy, complained that the judge was not granting bail to his clients on the basis of prosecution submissions.
The advocate's remarks came after the judge said he was not inclined to grant any relief as their pleas had been rejected on June 15 itself. Annoyed, the judge said, "A Union Minister talked to me about the matter. You yourself know every thing. Unless an unconditional apology is tendered by you, I will incorporate every detail in my order."
Justice Reghupathy said he would also write to the Prime Minister about the "pressure exerted" on him.
[The writer is Special Correspondent of ‘The Pioneer’]
Having consistently taken the position that the first-come-first-served system adopted by the Telecom Department for allotting spectrum was improper, the Telecom Regulatory Authority of India (TRAI) has suddenly turned coy and tacitly started backing the controversial process. Incidentally, the change in opinion coincides with the arrival of a new face as the regulatory panel head.
In an affidavit filed recently in the Delhi High Court, which is hearing a public interest litigation against the controversial allotment of 2G spectrum, TRAI diluted its opposition to the first-come-first-served formula. The court had asked for the regulator’s opinion on the dubious allotment of spectrum in February-end. The affidavit, which downplays the organisation’s consistent opposition to the dubious allotment, was filed after the appointment of JS Sharma as the new TRAI chairman.
A copy of the affidavit — which The Pioneer possesses — does not even mention ‘first-come-first-served’ as a basis for allotment, though the court had asked it to comment precisely on the allotment process.
Even though TRAI did say that it had suggested the auction method to determine market price of the spectrum on several occasions, it did not comment on its stand regarding the first-come-first-served system, let alone express its known unequivocal opposition to it.
Seeking to distance itself from the contentious issue, TRAI told the court, “It is respectfully submitted that the policy of allotment of telecom spectrum is an administrative matter under the jurisdiction of the Department of Telecom.” It added, “In the 2G bands, the allocation through auction may not be possible as service providers were allocated spectrum at different times of their licence and the amount of spectrum with them varies from 2x4.4MHz to 2x10MHz for GSM technology and 2x2.5MHz to 2x5MHz in CDMA technology. Therefore, to decide the cut-off after which the spectrum is auctioned, will be difficult and might raise the issue of level playing field.”
Interestingly, TRAI did not mention a word about a crucial letter written by its former chairman Nripendra Misra to Telecom Secretary Siddharth Behura on January 14, 2008, in which he had vehemently criticised the spectrum allotment on first-come-first-served basis. Misra blamed the Telecom Department for “cherry picking” in adopting those recommendations that suited the department while ignoring other important ones. In that letter, the former chairman had criticised the allotment of spectrum to new players without specifying the availability of the scarce resource. Misra had on several occasions blamed the department for making claims that the 2G spectrum allocation process was conducted as per TRAI recommendations.
“It would be unfair and misleading if any decision and consequent action is initiated without identifying and implementing the linkages elsewhere in the recommendation. It was reiterated that the authority (TRAI) should be formally consulted if there is any deviation from the totality of the recommendation,” Misra pointed out in the letter.
The letter added, “The authority has emphasised that there is need to ensure availability of adequate spectrum, its efficient utilisation and making the process (of spectrum allocation) completely transparent and based on a roadmap and well-researched plan.
It is sincerely hoped that the above suggestions/observations and compliance of legal provisions would receive highest consideration as they have a long-term bearing on the telecom sector.”
Misra’s tenure ended in March and Sharma was appointed the new chairman on May 14. Sharma is a former Secretary of Telecom and, prior to this appointment, was a member of the Telecom Disputes Settlement Appellate Tribunal (TDSAT).
[The writer is Special Correspondent of ‘The Pioneer’]
Monday, May 11, 2009
Telecom Minister’s Confidant enters into WiMax deal with five shell companies
After the 2G spectrum allocation, the Telecom Ministry headed by Union Minister A Raja is embroiled in yet another controversy, this time over BSNL’s WiMax franchise. While top officials of the public sector firm say nothing has yet been finalised, The Pioneer has learnt that the technical committee has short-listed six companies, of which five have been floated by Raja’s confidant Sanjay Kapoor and are filled with the latter’s relatives.
March 5, 2009 - The Pioneer
[The writer is Special Correspondent of ‘The Pioneer’ daily]
Sunday, April 26, 2009
The Chief Vigilance Commissioner has confirmed large-scale irregularities by the Telecom department in awarding licences for 2G spectrum services, and said it would soon fix responsibility for the lapses. In an exclusive interview to The Pioneer, CVC Pratyush Sinha said his organisation had found “gross violation” in the “non-transparent” methods adopted in licence allotments.
The Pioneer had through a series of reports recently exposed violation of rules and regulations in the 2G issue and the role allegedly played by the Telecom Ministry headed by the DMK’s A Raja.“We have found that there were gross violations and non-transparent activities in the allocation of 2G spectrum. Basically, the violations are: Granting licences on first-come- first-serve basis; licences being issued in 2008 at prices fixed in 2001, companies such as Swan and Unitech offloading their shares at whopping prices to foreign companies soon after the licences were awarded to them,” said the CVC. He said these steps had led to heavy losses for the national exchequer.
Sinha wondered why the Telecom department had not opted for the auction route. “The Telecom department says they had adhered to the TRAI (Telecom Regulatory Authority of India) guidelines. We found this version totally wrong. The department had used cherry-picking or pick-and-choose theory suit to their intentions. They selectively picked TRAI recommendations that suited them,” he said.
“We had already sent our findings to the department for clarification and fixing responsibility. We are not at all satisfied with their clarification and justification on the allocation 2G spectrum,” said the CVC, adding that they were in the process of “fixing responsibility”. The CVC also blamed the department for not insisting on a ‘lock-in period’ for the licence-holders to prevent speculative sales. In its report, the CVC blamed the department for exclusion of clauses in the licence agreement that would have prevented ‘offloading' of shares by the company.
The controversy over 2G spectrum allocation broke out when the Telecom department gave licences to new players like Swan and Unitech in October last year. These two real estate developers bagged the licences at throwaway prices. Swan got the licence for Rs1,537 crore for starting telecom operations in 13 circles in mid-2008. Within months, Swan offloaded its 45 per cent of the share to UAE-based Etisalat for Rs 4,500 crore, making a whopping profit.
Similarly, Unitech bagged the licence for Rs 1,651 crore for operating in 22 telecom circles. It too sold 60 per cent of the shares to Norwegian company Telenor, which is currently providing telecom services in Pakistan and Bangladesh, at a high price of Rs 6,120 crore.
[The writer is Special Correspondent of 'The Pioneer' daily]
[This article published in 'The Pioneer' on April 25, 2009]
Monday, March 30, 2009
Dec 11, 2008 - The Pioneer
How to become a crorepati overnight
When the spectrum controversy began to spin out of control and Telecom Minister A Raja was recently attacked by political leaders from within the UPA and outside for his questionable decisions, his mentor and DMK leader M Karunanidhi condemned the critics as people who could “not tolerate the rise of a humble Dalit”. As it turns out, the ‘humble Dalit’ allowed his ministerial clout and official address to be used for businesses which later connected with the spectrum deal, now under the scanner of the high court and the Central Vigilance Commission (CVC).
Not only did a commercial organisation, with the Minister’s wife as a director, begin operating from his official residence, well-placed sources said the information was concealed from the Prime Minister in violation of Service Rules. The Minister did not also deem it necessary to file an affidavit of ‘non-conflict of interest’ between his family’s business activities and his role as a Union Minister. In course of time, the address was changed and his wife officially withdrew from the firm. But the company’s association with the Raja family continued as closely as before, with the shares distributed among his kith and kin.
Green House Promoters Private Limited was formed barely four months after Raja became a Cabinet Minister (in charge of Environment and Forests) for the first time in May 2004. The Chennai-based real estate company was floated with an initial capital of only Rs 1 lakh, with AM Sadhick Batcha — a close associate of Raja — as managing director and Sadhick’s wife Reha Banu as a director. Sadhick hails from the Minister’s Perambalur constituency in Tamil Nadu. Documents filed with the Registrar of Companies show that Raja’s close relatives — such as his brother, nephew, niece and a few others — subsequently became directors in the company. With these high-profile inductions, the share capital of the firm surged to a respectable Rs 3 crore within 14 months of the operations being launched.Three years later, in February 2007, the Minister’s wife, MA Parameswari, was added to the board as a director.
Raja neither informed the Prime Minister of his wife’s and other relatives’ business activities, which he was mandated to do according to the Services (Conduct) Rules, nor filed an affidavit assuring there would not be a conflict of interest between his duties as a Minister and the business deals of his wife and other relatives.Even as Green House Promoters Private Limited continued to expand its real estate activities in Tamil Nadu (and Karnataka), with the Minister’s official residence doubling up as his wife’s business address, Raja was jolted by a report in early 2008 in a section of the media that pulled up the then Union Home Minister Shivraj Patil for using his official address as the business address for his son. Sensing trouble ahead, Raja got into damage control mode. His wife resigned from the directorship of the company on February 2008, but not before transferring her shares to another relative.
Documents available with The Pioneer show the shares were transferred to Raja’s niece, Malarvizhi. The 29-year-old is the wife of Raja’s nephew, a Government pleader in Tamil Nadu. The joint managing director of Green House is Raja’s elder nephew RP Paramesh Kumar. The Minister’s brother, A Kaliaperumal, is also a director of Green House. Another director of this company is R Ram Ganesh, the 22-year-old son of Raja’s elder brother A Ramchandran, who is an Indian Forest Service officer.From a humble beginning of Rs 1 lakh, the company soon soared to great heights.
One of the Green House company’s accounts at Canara Bank’s T Nagar branch in Chennai had remittances of more than Rs 150 crore over the last four years. The money came from the Middle East, Hong Kong and Singapore, besides India, though it remains unclear why these remittances were made.As the volume of business transactions increased, the company opened an office in Singapore in 2006. According to sources, it was done to cut down on the direct flow of funds into its Indian accounts and escape public scrutiny.The failure to inform the Prime Minister and file an affidavit was not a one-time lapse or an ‘oversight’ by Raja.
Wife Parameswari and the Minister’s relatives became active partners in another company floated a month after Green House came to exist. Breaching rules again, Raja did not inform the Prime Minister and filed no affidavit of non-conflict of interest. The new company, once again dealing in real estate, had a miraculously high turnover of Rs 755 crore in its very first year of operation.
Dec 15, 2008 - The Pioneer
Zero to Rs 755 crore in a Year !
Telecom Minister family firm sets record turnover.
Spectrum allottees investing?
The Pioneer had on Thursday reported that Union Telecom Minister A Raja’s wife MA Parameswari, a director in Green House Promoters Private Limited, used the Minister’s official residential address as her business address. This daily also noted that Raja had failed to file a ‘non-conflict of interest’ affidavit or inform Prime Minister Manmohan Singh of the business interests of his wife and other relatives. Parameswari was the company’s director till February 2008.
But this was not the only time the Minister had slipped on a mandatory requirement; he had apparently ‘forgotten’ to submit the required details when Parameswari first became a director in another company, Equaas Estates Private Limited, a real estate firm like Green House, which was established in September 2004.And as in the Green House case, the managing director of this company too was Raja’s confidant, Sadhick Batcha, from the Minister’s Perambalur constituency. Raja’s nephew RP Paramesh Kumar became the joint managing director. And, like the earlier firm, this company was also based in Chennai.
According to documents available with The Pioneer, it is this company which recorded a huge ‘domestic’ turnover of Rs 755 crore in the very first year of its operations.There is no mention in the documents filed with the Registrar of Companies about the source of this turnover. Form 23AC — to be filled by private limited companies for filing balance sheets/profit and loss statements with the Registrar of Companies — does not give any information on the following heads mentioned in the form: Sale of the goods manufactured; sale of the goods traded and sale or supply of the services. The form does not even indicate elsewhere how the turnover was achieved.
But talking about Green House, highly-placed sources in the Telecom Ministry told The Pioneer that Swan Telecom Private Limited, which has been in the news for being allotted in a controversial manner the 2G Spectrum licence, was likely to invest in Green House Promoters Private Limited — managed, as known, by relatives and close associates of the Telecom Minister. According to these sources, Swan planned to invest in 49 per cent equity in Green House at a dictated price of Rs 1,000 crore. To facilitate this financial deal, Greenhouse and Swan officials were reportedly working together with a Chennai-based audit firm.
When The Pioneer spoke to Sadhick Batcha over telephone, he confirmed that Green House was in an expansion mode. He also said the company was considering investment offers made by some firms. But when specifically asked whether Swan was one of these firms, he refused to confirm. The managing director said, “We are expanding but I cannot reveal the name of companies that are investing in Green House.” He directed this paper to contact one Kevin, ‘business adviser’ of Green House.Kevin, on his part, was equally cautious. “Green House is in talks for expansion. But I cannot confirm the names that are going to invest.”
Despite repeated attempts by The Pioneer, Swan Telecom managing director Shahid Balwa was not available for comment.“He will get back to you after some time. Currently, he is in a meeting,” said a person, who picked up his cellular phone. Balwa, however, did not return the call.It may be recalled that Swan Telecom bagged the licence for Rs 1,537 crore for operating in 13 circles in October. Within weeks, it sold 45 per cent of its shares to Etisalat, the UAE telecom giant, for $900 million (approximately Rs 4,500 crore). Swan Telecom’s roots can be traced back to July 2006, when it was established in the name of Swan Capital Private Limited.
The Mumbai-based firm, then part of a leading corporate house, was involved in non-banking financial services. The company applied for a GSM circle licence in January 2007. A month later, in February 2007, it changed its name to Swan Telecom Private Limited. In October 2007, the corporate house, that was already a strong name in the CDMA sector, quit the firm after the Centre announced a new telecom policy that allowed one company to operate both GSM and CDMA services. Two entrepreneurs - from the real estate sector — acquired Swan Telecom Private Limited. Balwa and Vinod Kumar Goenka became the new owners of the company. Balwa became the company’s managing director. Politically well connected, the young Balwa had been operating his real estate business from Mumbai.Unitech, another real estate company, also entered into a bumper deal without investing anything in telecom infrastructure. The company got a licence to operate in 22 circles for Rs 1,651 crore.
Within weeks of acquiring the circles, it sold 60 per cent shares for Rs 6,120 crore to a Norwegian company, Telenor, which is a major telecom player in Pakistan and Bangladesh. Unitech’s story, therefore, is not unlike Swan’s, which too disposed of part of its shares to a prominent foreign telecom firm after getting the 2G licence, in the process netting a huge profit.Interestingly, like Unitech and Swan, a number of real estate firms suddenly developed keen interest in the telecom sector over the last two years, virtually coinciding with Raja’s tenure at Sanchar Bhavan. This had upset the existing telecom operators, some of whom even complained to the Prime Minister over the reported ‘irregularities’ that followed.
The Minister, on his part, had justified the move, saying that he had attempted to break a powerful telecom operators’ cartel that had been working against public interest.Raja, Green House deny chargesUnion Telecom Minister A Raja has strongly denied any wrongdoing in the 2G spectrum allocation issue. Reacting to Thursday’s report of The Pioneer, Raja said he had nothing to do with the affairs of Green House Promoters Private Limited, the firm mentioned in the report, although his family members were part of its business. Green House too has denied in writing any irregularity.
The Minister said, “My wife, as an advocate, worked with them as the director (legal). She neither has any investment, nor attended any meetings.” He ruled out his involvement with the company, though he admitted to his close relatives being part of the firm. Sadhick Batcha, the MD of Green House, also said Raja’s wife was not a director of the board. “With regard to her involvement, I would like to clarify that she was appointed the director (legal) to advise on legal issues. She neither has any shares nor any involvement in the day-to-day management of the company,” he stated.
Why is BSNL sharing spectrum with pvt players?
Minister Raja makes company infrastructure available to competitors almost free. We have seen how Telecom Minister A Raja facilitated spectrum allotment to a bunch of private players on first-come-first-served basis. His decision resulted in a raging controversy, leading to the demands for his resignation and parliamentary probe into a range of affairs, including the business interests of his immediate family members. It now appears that the enterprising Minister had not just facilitated the spectrum allotment; his benign attitude went farther - in persuading the Ministry’s flagship unit, the Bharat Sanchar Nigam Limited (BSNL), to help out one of the licencees, Swan Telecom.
Within weeks of allotting the spectrum licence to Swan, Raja helped it have a strategic arrangement with the State-owned BSNL, literally for free. A memorandum of understanding (MoU) on September 13 between BSNL and Swan, called the Intra-Circle Roaming Agreement, does not indicate even a nominal sum that BSNL is charging for sharing its infrastructure. Incidentally, this is the first deal of its kind that the BSNL has entered into with any private player.The BSNL has been rather secretive of its charitable attitude towards Swan. Its Website does not have a word on this important development wherein a public organisation offers its services for free to a private party.
BSNL chairman and managing director Kuldeep Goyal confirmed the arrangement and termed it a “limited MoU”. Talking to The Pioneer, he said he could specify what charges BSNL planned to levy for providing the unprecedented intra-circle roaming facility to a private operator.When asked specifically on charges that BSNL may seek from Swan, Goyal replied, “See, this is only a limited MoU. No agreement has been signed with them. Swan has not yet started its operations. We are working out the details. I can’t tell you all details of the MoU. The money part will be specific in due course of time. I don’t know how much money we are going to levy on them. I told you this is only a limited MoU; specifics will be discussed when we come to a final agreement.”
The Pioneer has learned through highly-placed sources that the high-level management committee of BSNL had recommended 52 paisa per call from Swan for providing the intra-circle roaming facility. But this recommendation found no mention in the “limited MoU”.Sources further informed The Pioneer that the “limited MoU” greatly helped Swan in later sewing up the deal with the UAE-based telecom company Etisalat, which picked up stake in Swan for a reported sum of $900 million (approximately Rs 4,500 crore) in October.Some officers of the Wireless Planning and Co-ordination (WPC) section in Sanchar Bhavan, who objected to the BSNL-Swan deal, were shunted out. Joint Wireless Adviser RJS Kushwaha and Deputy Wireless Adviser D Jha were transferred out for questioning the arrangement. Telecom officials say Swan is expected to benefit to the tune of at least Rs 1,000 crore since it would not have to invest in infrastructure.
Jan 12, 2009 - The Pioneer
Raja’s kin in Govt job, but still on pvt firm roll
Minister’s Dy. Director nephew has major stakes as director in real estate company
The presence of Union Telecom Minister A Raja's close family members in private companies raised a political storm recently after The Pioneer revealed how the Minister, in contravention of rules, concealed the information from the Prime Minister. While the Minister then wriggled out by offering lame excuses, he would have some explaining to do about the latest revelation: His nephew Dr R Sridhar, who happens to be a deputy director in the Ministry of Environment & Forests, is also a director with significant stakes in a private limited company. He was selected for the Government post during Raja’s tenure as the Environment & Forests Minister.
Just like his uncle, Dr Sridhar also flouted the service rules when he failed to inform the Government before joining its service that he was a director with 15 per cent stakes in Kovai Shelters Promotors (Private) Limited. Incidentally, he continues to be a director with the Coimbatore-based real estate firm, established in January 2007 and headed by the Minister’s associate from his Peramballur constituency, Dr C Krishnamoorthy.
Not just that, Section 13 of the All India Services (Conduct) Rules bars a Government servant from having any interest in any private business or company. But, sources said, Sridhar never informed the Government of his being on the board of the private company. When The Pioneer contacted Sridhar for his reaction, he said, “I cannot comment right now. I have to check with Kovai Shelters.” He brushed off the important matter of holding private business interests while serving as a Class I Government officer. “I am busy now. I told you I have to consult my people,” he said.Sources in the Ministry told The Pioneer that Raja, then Environment & Forests Minister, had taken a keen interest in his nephew's recruitment soon after the company was formed. They added that though the 29-year Sridhar lacked the mandatory five-year work experience, he was selected for the post on the basis of a dubious certificate of experience.
“Sridhar (who did his doctorate in marine biology) produced a certificate from his guide, Dr L Kannan, that he had been assisting him for the past five years. Though we objected to the claim, we were forced to oblige the Minister under pressure,” sources added. Kannan is currently the Vice-Chancellor of Thiruvalluvar University in Tamil Nadu. Sridhar joined the Government’s service in November 2007 after obtaining the requisite clearances for the appointment of Class I officers. Sources said that he concealed the information of his private business all through the inquiry process.
Apart from Sridhar, Raja’s nieces R Anandabhuvaneswari and R Santhanlakshmi also have a 15 per cent share each in the real estate firm.Krishnamoorthy also owns a Coimbatore-based finance company, AGM Investment and Finance Private Limited, along with his brother C Sathyanarayan. They bought the firm in November 2004, soon after Raja became a Cabinet Minister. Incidentally, prior to becoming a Minister, Raja operated his law business in Peramballur from the first-floor office of Krishnamoorthy’s building.
The Pioneer has already reported the saga of two companies owned by Union Telecom Minister Raja’s close relatives. Green House Promoters (Private) Limited and Equaas Estates (Private) Limited were floated soon after Raja became a Union Minister. His wife Parameswari also served as a director on the Board of these two firms. Flouting rules, Raja had not filed information about his wife’s business to Prime Minister Manmohan Singh. Raja’s nephews RP Paramesh Kumar, R Ramganesh, brother A Kalia Perumal and niece Malarvizhi Ram are the directors of these two companies.
Jan 29, 2009 - The Pioneer
Firm with Rs.1 Lakh gets Rs.380 Cr Swan shares
When the 2G spectrum controversy broke out and allegations of covert deals surfaced in awarding licences to Unitech and Swan, a defensive Union Telecom Minister A Raja had claimed that no person from Tamil Nadu, and least of all he, was associated with or knew any of the firms. “These all are west Indian and north Indian companies. How can you say I have favoured them? These companies do not even belong to Tamil Nadu,” he had told reporters on several occasions.
But documents available with The Pioneer refute the Minister’s claims of innocence in the matter.The links with Swan get established through a Chennai-based firm, Genex Exim Ventures Private Limited, which was formed four months ago with a paid-up capital of just Rs 1 lakh. Entirely out of proportion to its size, Genex was on December 17, 2008, allotted shares in Swan Telecom worth a little over Rs 380 crore.
It may be recalled that Swan was one of the firms that was awarded the 2G licence on a first-come-first-served basis and, that too, on a licence fee fixed seven years ago. The resulting controversy impacted the 3G spectrum bidding process, which has been put on hold by the Union Government despite the Union Telecom Minister’s desire for a speedy allotment.According to documents filed with the Registrar of Companies in Chennai, Genex was incorporated on September 17, 2008, with two directors — Mohammed Hassan (58) and Ahamed Shakir (41). The company was represented by Ahmed Syed Salahuddin (32) on the board of Swan. The three belong to Kilukarai, a small coastal village in Ramanathapuram district of Tamil Nadu.
The Tamil Nadu link now gets strengthened. Ahmed Syed Salahuddin is the younger son of Syed Mohammed Salahuddin, an NRI business tycoon heading the Dubai-based real estate conglomerate, ETA Ascon Star Group, which began its Indian operations in 2006 by floating several real estate firms across the State. Raja was then the Union Environment Minister and his party, the DMK, had assumed power in Tamil Nadu.
The ETA Group entered into an MoU with the Tamil Nadu Government for setting up an IT Special Economic Zone worth Rs 3,750 crore when A Raja became the Union Telecom Minister in May 2007. Tamil Nadu Chief Minister M Karunanidhi was present at the much-hyped MoU-signing ceremony for the project. It was proposed at Kancheepuram, near Chennai, on almost a 500-acre plot.It is mysterious that a major business group should enter Swan’s board through a company with a meagre Rs 1 lakh paid-up capital. Incidentally, Genex Exim, having acquired more than 10 per cent of Swan Telecom shares, has not filed any document with the authorities to show its source of income. When contacted, a representative of the company refused comment.
Earlier, Swan’s plan to invest in Green House Promoters Private Limited, a firm run by Raja’s relatives, fell apart after The Pioneer reported the dubiousness of the deal on December 15, 2008.
According to the list of allottees filed by Swan with the Registrar of Companies in Mumbai, 1,33,17,245 shares having a nominal value of Rs 10 were allotted to Genex Exim at a premium of Rs 276 per share. Etisalat, one of the UAE’s major telecom players, was allotted shares in Swan. Etisalat was given shares worth more than Rs 3,000 crore through its Mauritius-based unit. Besides, 11,29,94,228 shares were allotted to Etisalat while the founder shareholder, Tiger Trustees, kept 1,73,01,463 shares worth Rs 495 crore with itself.
Feb 1, 2009 - The Pioneer
Scandal in the Airwaves
There is a joke in the telecom industry on the origins of the 2G (Second Generation) spectrum controversy. When Dayanidhi Maran had to resign as Telecom Minister in May 2007, and the then Minister for Environment and Forests A Raja stepped into his shoes, the new Telecom Minister brought with him to Sanchar Bhavan, the headquarters of the Telecom Ministry, those real estate brokers who normally hang around Paryavaran Bhavan (headquarters of the Environment Ministry). It was in this way, telecom industry insiders laugh, that a clutch of real estate brokers got a toehold in the telecom sector. These real estate brokers soon cornered spectrum allocations, resulting in a tussle for the sharing of the scarce electromagnetic waves between existing telecom services providers, and the ‘new services providers’.Facts relating to the spectrum scam weren’t much different.
The scam can be traced to real estate companies — Swan and Unitech — bagging spectrum licences at throwaway prices. They then offloaded their shares at exorbitant prices to multinational telecom giants. Swan Telecom, for instance, bagged licences for operating in 13 circles by paying a mere Rs 1,537 crore. Within months, it sold 45 per cent of its shares to Etisalat, the UAE telecom giant, for US $900 million (approximately Rs 4,500 crore). Swan Telecom was earlier known as Swan Capital and owned by Anil Ambani. In 2007, this company was taken over by Maharashtra based real estate entrepreneurs Shahid Balwa and Vinod Goenka. There are rumours in telecom circles that the takeover by Balwa and Goenka was felicitated by Raja.
Unitech, another real estate company, too reaped a bumper harvest without investing a penny in telecom infrastructure.The company got licences to operate in 22 circles for Rs 1,651 crore. Within weeks, it sold 60 per cent of its shares for Rs 6,120 crore to the Norwegian company Telenor, currently a major telecom player in Pakistan and Bangladesh. Unitech had applied for licences in several names — Unitech Infrastructure, Unitech Builders and Estates, Aska Projects, Nahan Properties, Hudson Properties, Volga Properties, Adonis Projects and Azare Properties among them. They were able to merge all their licences when Telecom Minister Raja signed another dubious notification allowing this to happen. Valued at a whopping Rs 60,000 crore, the 2G spectrum allocation scam is perhaps the mother of all scams in India.
After he became Telecom Minister, A Raja allotted 2G spectrum to new entrants in the telecom sector at throwaway prices. Spectrum allotted in the beginning of 2008 was sold at rates fixed in 2001. This happened in spite of the Telecom Regulatory Authority of India’s (TRAI’s) — and the Finance Ministry’s — vehement objections. There was also no auction, and licences were given on a shabby ‘first come first serve’ basis. Third, the entire procedure lacked Cabinet approval, even though deals involving such huge sums of money require mandatory approval of the Cabinet Committee on Economic Affairs.
Even as the allegations broke out, Raja kept insisting he was sticking to the rulebook. He justified his decisions saying he was trying to break the cartelisation in the telecom sector, and claimed that the ‘aam aadmi’ would benefit by his actions. Even his party chief and Tamil Nadu Chief Minister M Karunanidhi rubbished the allegations against Raja, saying that leaders of certain political parties could not tolerate the rise of a Dalit.A series of investigative reports by this newspaper, however, suggested otherwise. The Telecom Minister’s money parking methods — by floating companies in the names of close relatives — was soon out in the open. After Raja became a Union Minister in 2004, many of his close relatives started real estate companies. Companies like Green House Promoters, Equaas Estates and Kovai Shelters Promoters have Raja’s brothers, nephews and nieces as directors on their boards. The Minister even got his wife, MA Parameswari, appointed on the board of directors for Green House and Equaas Estates. This he did by violating another code — the service rules and the code of conduct for Ministers.
As a Cabinet Minister, Raja had to inform the Prime Minister about his wife’s business, and file a mandatory affidavit saying there was no clash of interest in the discharge of his duties. He did neither. The Minister now defends himself by saying the entries with the Registrar of Companies are wrong, and that he and his wife were not aware that she was a director in Equaas! Equaas Estates’ domestic turnover, on the other hand, showed more than Rs 755 crore in its very first year. Even this, Raja now says, was a “wrong entry” in the books of the Registrar of Companies. Meanwhile, Green House Promoters, one of the many companies with Raja’s relatives on its board, opened an office in Singapore in violation of Indian foreign exchange norms. And one director of Kovai Shelters, Dr R Sridhar, a nephew of the Telecom Minister, holds a 15 per cent share in the company despite being a Class I officer in the Ministry of Environment.
In earlier instances, Raja often defended himself by saying Swan and Unitech were Maharashtra and Delhi-based companies, and no one from Tamil Nadu was associated with them. Documents filed with the Registrar of Companies, Mumbai, however, prove otherwise. On December 17, 2008, Swan allotted Rs 380 crore worth of shares to the Chennai-based Genex Exim Ventures, a company floated just four months ago with a meagre capital of Rs 1 lakh. According to the documents available with the Registrar of Companies, Chennai, Genex was incorporated on September 17, 2008 with two directors — Mohammed Hassan (58) and Ahamed Shakir (41) — who came from Kilukarai, a small coastal village in Ramanathapuram district in Tamil Nadu. Ahmed Syed Salahuddin (32), who represented the company on the board of Swan, also came from the same village.
There is more indication of the Tamil Nadu link. Ahmed Syed Salahuddin, who represented the company on the board of Swan, is the younger son of Syed Mohammed Salahuddin, an NRI businessman who heads the Dubai-based real estate conglomerate ETA Ascon Star Group. This group began its Indian operations in 2006 by floating several real estate firms across the State. Raja was then Union Environment Minister, and his party DMK had assumed power in Tamil Nadu. ETA signed an MoU with the Tamil Nadu Government for setting up an IT Special Economic Zone worth Rs 3,750 crore when A Raja became Union Telecom Minister in May 2007. Tamil Nadu Chief Minister M Karunanidhi was present at the MoU signing ceremony for the proposed project at Kancheepuram, near Chennai, on a nearly 500 acre plot.It seems mysterious that a large business group entered Swan’s board through a company with a meagre
Rs 1 lakh paid up capital. Incidentally, Genex Exim has not filed any document with the authorities to show its source of income, even after acquiring Rs 380 crore worth of shares of Swan Telecom.
How Raja had blatantly favoured Swan was evident from a rather unusual deal struck between that company and the state-owned BSNL. This “intra-circle roaming deal”, signed between the two companies on September 13, 2008, was literally silent when it came to money. According to the MoU, Swan could use spectrum, communication towers and the entire network of BSNL free of cost. Though the BSNL management suggested charging 52 paise per call, this clause was mysteriously absent in the MoU. BSNL was forced to sign this deal just 10 days before the sale of Swan’s shares to Etisalat. It helped swell Swan’s coffers without the company investing a single rupee.BSNL had never entered into an “intra-circle roaming deal” with any operator till then. When controversy broke out, BSNL Chairman and Managing Director Kuldeep Goyal sought to quell the trouble by coining a new word for it — a “Limited MoU”!
Meanwhile, Raja shunted out all senior officials in BSNL and the Wireless Planning Co-ordination (WPC) wing of the Telecom Department who objected to the deal. Top telecom officials alerted the Prime Minister, but nothing came out of it. Even a Congress MP, Dharam Pal Sabharwal, wrote to Manmohan Singh in November 2008, but with no result. Another letter written to the Prime Minister by CPI(M) Politburo member Sitaram Yechury in February 2008 clearly warned of a “scam in the offing” when more than 575 real estate companies and stock broking firms approached the Telecom Ministry for spectrum licences. All this while, Raja kept insisting that he had the approval of the Prime Minister.
The Telecom Minister even blatantly lied in Parliament when he said his decisions on 2G spectrum allocation were never objected to by TRAI or the Finance Ministry.The unreformed Raja was also eager to allot 3G (Third Generation) spectrum before the end of his tenure. His attempts, however, came to naught after the Government decided to refer the 3G auction to a Group of Ministers. Earlier scheduled for January 16, the date was changed to January 30 and has now been deferred indefinitely after the intervention of the Cabinet Secretary, who suggested a “thorough study” into the process.
Current developments however suggest that the auction may not take place during the tenure of this Government. The question that arises now is, who authorised Raja to announce the auction dates in advance, before getting a Cabinet clearance?Although he was aware of Raja’s corrupt ways, it was perhaps the compulsions of coalition politics that kept Prime Minister Manmohan Singh away from stepping in and setting things right. For, observers believe, every time he summoned Raja, Raja’s party chief Karunanidhi landed in Delhi and dashed off to the Congress leadership, asking it to keep the Prime Minister quiet. This is perhaps what happened on December 4, 2008 when Karunanidhi landed in Delhi with a multi-party delegation to raise the issue of the ‘plight’ of Sri Lankan Tamils. The delegation met the Prime Minister at 10 am. An hour later, the DMK chief met Sonia Gandhi along with his daughter Kanimozhi — this time separately. Even his close confidant, Union Minister TR Baalu, was asked to leave after the photo session. After the meeting, Karunanidhi held a Press conference where he said he had discussed the Sri Lankan issue with the Prime Minister and Sonia Gandhi. Sceptic Tamil leaders, however, wonder why were not allowed to participate in the talks with Sonia Gandhi when they were all present in the meeting with the Prime Minister. Many of them believe that Karunanidhi had in fact asked for Sonia Gandhi’s ‘help’ in sharing the burden of the spectrum scam during that meeting.
Feb 18, 2009 - The Pioneer
Raja kin lied over resignation
Worked simultaneously for Govt and private company till Pioneer expose
Facing charges of holding the post of director in a private company while being in the service of the Central Government, Telecom Minister A Raja’s nephew Dr R Sridhar has found an ingenious way to wriggle out of the mess.Serving a legal notice on The Pioneer for exposing the violation of All India Services (Conduct) Rules, which bar Government employees from associating with private business, Sridhar has claimed he resigned from the private company nearly a year ago, on March 24, 2008, to be precise. But the online registry of the Ministry of Corporate Affairs shows that Sridhar submitted his resignation on January 27, which is two weeks after The Pioneer expose on him. But to escape action for violating the Government rules, he pre-dated his resignation letter to March 24, 2008.
The Pioneer had on January 12 reported that Sridhar, who is a Deputy Director in the Ministry of Environment and Forests, simultaneously held the directorship in the Chennai-based Kovai Shelters and Promoters Pvt Ltd. Interestingly, documents of the Registrar of Companies, Coimbatore, show that Sridhar was very much a director of the Kovai Shelters and Promoters Pvt Ltd when its last annual general body meeting took place on August 7, 2008. Sridhar’s appointment to the post of Deputy Director in the Ministry of Environment and Forests was notified when his uncle Raja headed the Ministry in early 2007.
Sridhar, who holds a doctorate in marine biology, did not have the mandatory five-year experience.Sources in the Ministry said Sridhar had produced a certificate from his research guide that he had assisted him for five years. According to them, the officials were forced to accept the experience certificate produced by Sridhar and the guide — Dr L Kannan —was later elevated as the Vice-Chancellor of Thiruvalluvar University in Tamil Nadu. In a legal notice sent to The Pioneer, Sridhar claimed that he had joined Government service on March 26, 2008, and left the real estate company’s directorship two days prior to that.
Sridhar also violated the Government’s recruitment rules by suppressing the fact that he was holding the directorship and 15 per cent shares in Kovai Shelters. Apart from Sridhar, Raja’s nieces R Anandabhu-vaneswari and R Santhanlak-shmi also have 15 per cent shares each in the real estate firm. Raja's close associate, Dr Krishnamoorthy, is the managing director of this company. Krishnamoorthy also owns a Coimbatore-based finance company, AGM Investment and Finance Private Limited, along with his brother C Sathyanarayan. They bought the company in November 2004, soon after Raja became a Cabinet Minister. Incidentally, prior to becoming a Minister, Raja operated his law business in Peramballur from the first-floor office of Krishnamoor-thy's building.
The Pioneer has already reported the saga of two companies owned by Union Telecom Minister Raja's close relatives. Green House Promoters (Private) Limited and Equaas Estates (Private) Limited were floated soon after Raja became a Union Minister. His wife Parameswari also served as a director on the board of these two firms. Flouting rules, Raja had not filed information about his wife’s business to Prime Minister Manmohan Singh's office. Raja's nephews RP Paramesh Kumar and R Ramganesh, brother A Kalia Perumal and niece Malarvizhi Ram are the directors of these two companies.
March 5, 2009 - The Pioneer
Max greed: Raja’s friend shows how to mint profit
Even as the dust is yet to settle on the 2G and 3G scandals allegedly involving A Raja, the Union Telecom Minister is embroiled in another controversy. This time, it is to do with the allotment of franchisees for BSNL’s recently-launched WiMax services to a company owned by one of the Minister’s close associates from Perambulur.The company, Wellcom Communications India Pvt Ltd, has applied for licences to seven most revenue-generating of the 16 circles in India.
According to sources, the revenue-sharing pattern agreed upon is 75 per cent to the private party and 25 per cent to BSNL. Sources said that if the company gets the nod for the 20 Mega Hz spectrum, it may sell off stakes to foreign players at huge profits, like in the 2G case.They have questioned the need even for the appointment of franchisees when the BSNL can directly provide the service. WiMax technology provides wireless Internet and voice in future to laptops and mobile phones. The number of WiMax connections is expected to rise to 50,000 subscribers in the first year itself, leading to a target of 1 million subscribers in five years in each circle.Wellcom Communications applied to be a franchisee in November 2008.
The Chennai-based company, which was initially engaged in minor engineering and construction works, was formed in December 2006 with a Rs 10-lakh capital. This went up to Rs 10 crore in November 2008, apparently with an aim to enhancing the company’s credibility for the WiMax bid.Wellcom Communications is represented by T Silvarajoo (55) with 15 per cent shares. The other two directors are Dato Vijayakumar Ratnavelu (47) and T Gunasegaran Thiagarajan, both Tamilians with a Malaysian citizenship. Dato Vijayakumar is also running a company with the same name in Malaysia.
Silvarajoo hails from Raja’s constituency Perambulur and is a close associate of the Minister. He is also associated with Dr C Krishnamoorthy, in whose building Raja had begun his legal practice in the constituency. Silvarajoo is currently a sub-contractor of CPWD’s road works. He supplies pellets from a quarry owned by Krishnamoorthy for the ongoing Chennai-Tiruchirappally National Highway (NH-45) project.The Pioneer had earlier reported that Krishnamoorthy headed a real estate company, called Kovai Shelters, with Raja’s nephew and two nieces on its board of directors with 45 per cent shares.
Though the BSNL had invited franchisees a year ago, it postponed the bid several times allegedly due to pressure from the Minister who, sources said, kept adding names to the original list. Apparently under Raja’s pressure, BSNL chairman and managing director Kuldeep Goyal initiated the franchise-awarding procedures in mid-January. Despite repeated attempts by The Pioneer, the CMD refused to talk to this newspaper.Wellcom Communications has applied for Chennai, Karnataka, Rajastan, Bihar, UP (West), Haryana and Orissa circles.
The Pioneer has learned that the BSNL would finalise the franchise by next week.The Pioneer had earlier reported that the BSNL had entered into an unprecedented arrangement with the private party, Swan Telecom, for intra-circle roaming service without any financial benefit to the public sector unit. Though a BSNL expert committee had suggested a levy of 52 paise per call, it found no mention in the MoU signed with Swan.
The Pioneer has also reported the saga of two companies owned by the Minister’s close relatives. Green House Promoters (Private) Limited and Equaas Estates (Private) Limited were floated soon after Raja became a Union Minister. His wife Parameswari also served as a director on the board of these two firms.
Saturday, March 28, 2009
He started: “A mutiny in my mind has compelled me to raise this debate. When things of such magnitude, as I shall describe to you later, occur, silence became a crime…..”
It went on, when with several counter arguments with the then Finance Minister T.T. Krishnamachari, while the Lok Sabha heard it with pin drop silence. Indian democracy was first experiencing this shocking situation. “Mr.Speaker, there is going to be some sharp shooting and hard hitting in the House today, because when I hit I hit hard and expect to be hit harder. I am fully conscious that the other side is also equipped with plentiful supplies of TNT,” continues Feroze
The scam was on the Life Insurance Corporation’s shabby deal with a businessman Haridas Mundhra. Feroze exposed with all documents, how Mundhra manipulated the LIC to purchase shares in his little known companies. This first scam in India is now known as ‘Mundhra deal, which resulted the resignation of the Finance Minister, termination of the Finance Secretary and imprisonment of Mundhra.
‘Feroze Gandhi – The Political Biography’, the recently released book by veteran parliamentarian Shashi Bhushan is a real tribute to the ‘forgotten’ Gandhi of Indian politics. The book enumerates the struggles lead by Feroze Gandhi and his bombarding speeches in Lok Sabha against the corruption.
The speeches of Feroze on the corruption against the Dalmia – Jain gives the outline of how the corporate men grow over public money. It is unthinkable for a politician to bring the corruption charges against media barons. Feroze exposed Dalmia- Jain’s take over of Bennett and Colman by siphoning the funds of Gwalior Bank and Bharat Insurance. They were the directors of these banking and insurance companies and transferred the money for their own company, which lead to the immediate collapse of the public institutions.
No corporate men saved from Feroze’s hard hitting against corruption. Birlas, Goenka (“not the one running a newspaper, this is another Goenka running banks,” Feroze once clarified”) were exposed by Feroze for using public money by running banks and insurance companies and transferring it to their own business.
When some alleged that Feroze was doing these all for Tata’s, as both were Parsis, next came against Tata. Feroze found Telco was making money from railways by supplying locomotive engines at an exorbitant rate. With evidence Feroze exposed Telco for charging more than double for an engine to railways, which lead to exit for Tata and formation of locomotive workshops in public sector.
While immersed in the political crusades and fight against the post-independence monopoly of corporates, he continued his association with journalism as a Managing Director of National Herald and also associated with the Indian Express editorial team.
As a true socialist, Feroze was the mentor of most of the public sector undertakings in India, including the nationalization of LIC, Indian Oil. Born in a rich family, he went to jail at the age of 18. he can’t be a mute spectator, when freedom struggles were going outside the fortress of his bungalow. The young revolutionary was ‘nuisance’ to his aunt, who was the head of the medical services in Allahabad. She has to file apologies to British government, as and when the nephew was caught.
Fed up with the son’s activities, mother met Gandhiji and requested to advice feroze to concentrate on studies. Hearing the complaints, Gandhiji said : “Your son is a revolutionary. If I get seven persons like him, India would be free in seven days”.
The author Shashi Bhushan made a good effort to bring out the political biography of a person who was son-in-law, husband, and father of three prime minister’s of India. The 230-page book dedicated to Rajiv Gandhi is mainly focusing on the political life of the "real young turk" of India. It had only few pages on the controversial personal and married life of Feroze Gandhi and it completely in a gazette nature.
Describing the jovial mood of the marriage ceremony, author end the chapter abruptly :
“Indiraji too was full of responsibility in the political field. She also had to take care of her father. Both of them were actively involved with their political responsibilities”. Author gives only few lines on the revolutionary love affair of Feroze and Indira and literally silent how Nehru approved it. With single line,‘ they travelled in a ship from London to India back in 1940’, writer leaves everything back to the reader.
But a mention by Jawaharlal Nehru is enough for the reader to assess the personal life of Feroze, who passed away in 1960 at the age of 48. Seeing the huge crowd, assembled for cremation, Nehru said : “I did not know that Feroze was so popular”
Technical Details :
Title : Feroze Gandhi – a Political Biography
Author : Shashi Bhushan
Publisher : Frank Bros & Co.
Page : 230
Price : Rs.450
Friday, March 27, 2009
Sept 11, 2008 - The Pioneer
Met flouts rules in buying radars
The India Meteorological Department (IMD) has placed an order for purchasing 12 S-band Doppler Weather Radars, worth more than Rs 100 crore, violating a key tender condition on providing the source code.Shutting the doors on indigenously-built radars developed by the Indian Space Research Organisation (ISRO), the IMD has decided to buy these from Beijing Metstar, a Chinese assembler which has not offered to provide a source code. The firm has a joint venture with Lockheed Martin.
For purchase of the S-band Doppler Weather Radars for early warning of tsunami, the IMD floated a tender on October 24, 2007. Apart from ISRO, four international companies participated in the tender. They include Selex Gamatronik (Germany), EEC (US), Sun Create (China), the world-renowned manufactures of S-band Doppler Weather Radars, and Beijing Metstar, Lockheed Martin's Chinese partner. ISRO entered the bid through the public sector Bharat Electronics Limited (BEL).
According to the tender procedures, the bidding companies had to supply the source code. The Pioneer's investigations reveal that no company was ready to share the source code unconditionally, except Sun Create of China. Selex Gamatronik of Germany offered the source code on escrow basis. Beijing Metstar could not even offer the source code since it was just an assembler and not a manufacturer. The firm used technology from Sigmet of the Vaisala Group of companies, which refused to share its source code, considered an intellectual property, with others.
The IMD on May 30, 2008, awarded the job to Beijing Metstar. According to Union Science & Technology Minister Kapil Sibal, the tender was awarded for Rs.105.85 crore. Justifying the firm's selection, Sibal told The Pioneer it had "offered off-the-shelf source codes". The Minister evaded a reply when The Pioneer sought a clarification on the meaning of "off-the shelf source code" and asked him to confirm whether Beijing Metstar had supplied the source code.
He also did not respond to the question why Enterprise Electronics Corporation (EEC) and Sun Create were rejected by TEC, though they were among the biggest radar manufacturers in the world.A clearer reply came from Secretary of Science & Technology Dr T Ramasami on the Beijing Metstar issue. "None of them, except Sun Create, offered unconditional source code," Ramasami said. Though he added that the supply of source code was not a main condition, tender documents available with The Pioneer prove otherwise.
The Pioneer investigation shows that Sun Create was the lowest bidder and also offered the source code unconditionally. Apart from offering the source code, which is worth millions of dollars in the international market, the rate for supply of 12 radars offered by Sun Create was Rs 98.06 crore. The company also offered to manufacture six of the 12 radars in India.
The Pioneer has learned that a TEC member, Dr TGK Murthy of ISRO, was kept out of the loop and not present in the decision-making process. Sources in ISRO said Murthy was sidelined because he did not favour the import of radars and strongly advocated their indigenous production. In response to a query, Ramasami said the TEC consisted of eight members and Murthy's name did not figure in the list provided by him.
When The Pioneer contacted Murthy to know whether he was the part of the decision-making body, he quipped: "I don't want to talk about my bad experience." He refused to elaborate. The IMD officials cleverly aborted ISRO's claim by inserting a clause in the tender that bidders must have two working radars. ISRO has only one such radar operating successfully at Satish Dhawan Space Centre at SHAR in Sriharikota. ISRO's second radar in Banglore would be operational by mid 2009.
Sept 12, 2008 - The Pioneer
ISRO complains to PM against Met's 'import mania'
Prime Minister Manmohan Singh has constituted a joint working group to oversee the modernisation of India Meteorological Department following ISRO's complaints that its bid for supply of 12 S-Band Doppler Weather radars were ignored to help a foreign firm. Sources in ISRO revealed their top brass had complained to the Prime Minister on the 'import mania' of IMD officials who had bypassed claims of indigenous manufacturers to award the contract to a foreign firm that did not meet the tender criteria.
The chairman of the group is IMD director general Ajit Tyagi and co-chairman is ISRO project director Dr TGK Murthy, who incidentally had been removed from the Technical Evaluation Committee (TEC) for radar purchase.ISRO officials pointed out to the PMO while Defence Research & Development Organisation (DRDO) placed an order with them on May 1 for similar radars, the IMD strangely ignored their claims.
They also said similar radar located in Sriharikotta was working successfully.The tender floated by IMD for the purchase of 12 S-band Doppler Weather radars included a peculiar clause allegedly to bypass ISRO, which participated in the tender through Bharat Electronics Limited (BEL). The clause insisted that the bidder should have two working radars. "Everybody knows that ISRO has one working radar. Our next radar will be operational by mid-2009. This clause was purposefully included to throw out ISRO and import from their favourite company," said the ISRO official.
When The Pioneer sought a clarification from the Minister for Science and Technology, Earth Sciences Kapil Sibal on ignoring ISRO's claim, he replied: "ISRO-supported firm BEL could not qualify in TEC because they failed to submit earnest money deposit which is essentially required to be submitted by every bidder. Despite this they were included for TEC evaluation but they got disqualified because they did not have two Doppler radars in working condition."The Pioneer had earlier reported the radar supply order had gone to Beijing Metstar that had not offered a source code, which was the main requirement in the tender document. While ISRO lost the order, even the lowest bidder Sun Create which offered source code unconditionally, did not get the order.
Feb 16, 2009
IMD struck deal for buying weather systems, alleges BEL.
One of the leading public sector undertakings, Bharat Electronics Limited (BEL), has alleged foul play and corruption in finalising the purchase of multi-crore lightning detection systems (LDSs) by the Indian Meteorological Department (IMD). The LDS installation would help improve weather forecast and thunderstorm study.The tussle between the two Government agencies started when the IMD rejected BEL’s offer at the stage of technical evaluation.
The IMD invited tenders for the installation of 10 LDSs in October 2008. The department has also announced installation of 90 more LDSs over the next two years. There are only three companies manufacturing the LDS. One is Nowcast GmbH of Germany, represented by BEL; second is TOA of US; and the third is Vaisala of Finland.Nowcast, which is represented by BEL, has installed 125 lightning stations in over 25 countries. The market price of the equipments supplied by this company is around Rs 60 lakh per unit, which is much lower than that of Vaisala’s equipment.
Vaisala’s representatives in India are HBE-Aviosec Pvt Ltd and Three-D Integrated Solutions Pvt Ltd. Interestingly, the majority stake in these two Delhi-based companies is held by same persons — Nand Lal Bhatia and Kuldeep Kaul.
A letter written by BEL to the IMD Director General alleges gross violation in the tender procedure to provide “unfair advantage” to the two firms and “mislead a fair tender evaluation”.“Of the four submitted bids, it is observed that two parties — ie M/s HBE-Aviosex and Three-D Integrated Solutions — have quoted the similar product and model of Vaisala LS 800. Further, it is brought to your notice that the ownership and management of both these companies are the same,” points out BEL’s letter to the Meteorological Department.
“They have quoted the same equipment from Vaisala Inc under the pretext of two different names of companies to gain unfair advantage and mislead a fair tender evaluation. This practice is also against the prevailing and established tender norms,” added BEL in its complaint, dated January 15. The public sector undertaking had earlier sent another complaint on January 9 for not being intimated about any details on the tender procedures.
Installation of LDS is the part of a Rs 500-crore modernisation package for the accurate studies on forecasting weather. Apart form the data received from the radars, the compilation of data collected from the LDS would enhance the advanced study on weather prediction.This initial tender for the installation of 10 equipments was meant to be completed before the Commonwealth Games 2010.
Obviously, the firm which bagged this initial order would also stand to get the contract for the supply of the remaining 90 equipments. While these two companies would simply acquire the LDS from Vaisala and supply it to IMD, the BEL proposed to import 10 LDS and indigenously built the remaining 90 with the support of Nowcast.But the Meteorological Department argues that the other products were of inferior quality and did not meet the required technical specifications.
When The Pioneer contacted the Director General of Meteorological Department, he replied that the bid submitted by BEL "was not considered technically acceptable". The detailed letter of the Director General lists out a series of "technical flaws" of the BEL-sponsored equipments.
The BEL technocrats and their principal company, Nowcast of Germany, describes the Meteorological Department's observations as "a bundle of lies" to implement a "hidden agenda". Whatever may be the reasons for the rejection of BEL's bid, the question remains why two firms owned by the same persons who represented the same Finland company were selected for supplying the same model.
The Pioneer had earlier reported (on September 11, 2008) that in violation of norms, the Meteorological Department had also kicked out BEL from contract of the ISRO-made S-Band Doppler Radars and awarded a deal worth more than Rs 100 crore to Chinese assembler Beijing Metstar, which is controlled by US giant Lockheed Martin.
[Writer is a Special Correspondent of 'The Pioneer']
Thursday, March 26, 2009
Tuesday, March 24, 2009
Vaccine Scam : Sabotaging the vaccine production in India's public sector by Health Ministry and WHO
Report - 1
May 10, 2008 – ‘The Pioneer’
Health Minister Anbumani Ramadoss linked vaccine scam
A Chennai-based private company, owned by a close associate of Union Health Minister Anbumani Ramadoss, was granted a Rs 14-crore bank loan for starting production of vaccines just two weeks before the Health Ministry banned vaccine production by three Central public sector undertakings (PSUs). Ramadoss ordered the closure of vaccine production by three PSUs citing a June 2007 WHO report, which claimed that these units were using redundant technology. BCG Vaccine Lab (Chennai), Pasteur Institute (Coonoor) and Central Research Institute of Kasauli were asked to close down production on January 22. Incidentally, the private company -- Green Signal Bio Pharma -- received Rs 14 crore as loan from Union Bank of India, Chennai, for starting production of vaccines on December 27, 2007. As bank guarantee, the private company hypothecated its vials and other products, for which it had entered into a supply contract with BCG Vaccine Lab, Chennai, a PSU under Health Ministry. This shows that the PSU facilitatedprocurementofthe loanforaprivatecompetitor. It is well known in Tamil Nadu's political circles that Ramadoss and the Green Signal Bio Pharma owners are close. The company's chairman and managing director, P Sundaraparipooranan, is a politician-turned-businessman. The company was registered in November 2005 but it decided to get into vaccine production only in December 2007, when Ramadoss banned the three Central PSUs. Before Sundaraparipoornan's meteoric rise, he was a small-time office bearer in the PMK. A couple of scandals earned him good moolah, some limelight and close ties with the PMK's powers-that-be. He had faced charges of irregularity in supplying equipment to the Madurai Meenakshi Medical College and getting no-objection certificate (NOC) for educational institutes in Tamil Nadu. Sundaraparipoornan is a close associate of Ramadoss and his brother-in-law MK Vishnuprasad, a Congress MLA. Dr N Elangeshwaran, the then director of two vaccine-making PSUs -- BCG Vaccine Laboratory, Chennai, and Pasteur Research Institute, Coonoor -- executed Ramadoss' wish to shut down vaccine production at these undertakings. His wife E Shanti is a major share holder in Vatsan Bio Pharma, which is also co-owned by Sundaraparipoornan and his wife. This company, formed in January 2006, is also a relatively new entrant invaccine-makingindustry.Elangeswaran, currently working as senior specialist (microbiology) in Central Government Health Services, Chennai, is also facing a CBI investigation into his alleged role in recruitment process. The Pioneer's investigation also establishes Elangeswaran's role in setting up the private vaccine factory of Green Signal Bio Pharma while serving as the head of the two vaccine-making PSUs. The Pioneer has copies of e-mails through which Green signal Bio Pharma consulted him about installing equipment and deciding the factory's layout. Trade unions leaders and several others who protested against Ramadoss' decision to ban vaccine production by the PSUs allege that the Health Minister deliberately ignored the WHO's offer for assistance to upgrade the technology at the PSUs. These three PSUs were producing 90% of the total vaccines in the country.
Wrong dose :
Union Health Ministry lets Green Signal Bio Pharma, a Chennai-based private firm, receive Rs 14 crore as loan from Union Bank of India, Chennai, for starting production of vaccines on December 27, 2007
Three PSUs -- BCG Vaccine Lab (Chennai), Pasteur Institute (Coonoor) and CRI (Kasauli) told to close down production on January 22
Cosy relations between Ramadoss and Green Signal Bio Pharma owners an open secret in TN political circles. The company was registered in November 2005, but decided to get into vaccine production only in December 2007
TU leaders, who opposed Ramadoss' decision to ban vaccine production, allege that the Health Minister purposefully ignored WHO offer for assistance to upgrade technology there. The PSUs were producing 90% of the nation's total vaccine output
Report - 2
May 21, 2008 – ‘The Pioneer’
Health Minister gifts Rs.3.25 cr to associate’s company for a simple seed
In yet another instance of the glaring nexus between the Union Health Ministry and private vaccine-producing companies, a Public Sector Undertaking (PSU) paid an astronomical amount to a politically-connected private company for measles seeds, primary raw material for vaccines, and entered into a lopsided profit-sharing agreement which benefited the latter.
Interestingly, the Pasteur Institute of Coonoor -- which purchased measles seeds from Green Signal Bio Pharma for Rs 3.25 crore on November 27, 2006 -- has produced only rabies vaccine for over 100 years. The Health Ministry sanctioned it Rs 17.80 crore for branching out in measles vaccine production only after it entered into the deal with Green Signal Bio Pharma. The nexus became clear when the Health Ministry directed the PSU to stop producing the rabies vaccine and allowed it to carry on trial tests for the measles vaccine.
Several aspects of the deal are bizarre and clearly show that rules were thrown to the wind to help the private company. For example, the PSU paid Rs 3.25 crore to Green signal Bio Pharma for measles seeds, whereas the latter bought BCG seeds from BCG Vaccine Lab (Chennai), another Central PSU, for just Rs 1.05 lakh on September 26, 2006. This agreement was also signed by Dr Elangeshwaran, the man who was also director of the Pasteur Institute when it signed the controversial deal with Green Signal Bio Pharma.
It is obvious that the deals were heavily tilted in favour of the private company, owned by Sundaraparipoornan, known in the political circles of Tamil Nadu as a close associate of Union Health Minister Anbumani Ramadoss.At the time when Pasteur Institute bought the seeds from Green Signal Bio Pharma, Hyderabad-based Indian Immunological Limited, another PSU, was providing the same seeds for negligible cost to even private companies to boost up quality vaccine production. Also, Green Signal Bio Pharma is neither an accredited supplier not producer of measles seeds. And this is not all! There was more serious violation of rules, which was even discussed at the highest level in the Health Ministry and bypassed.
Documents available with The Pioneer show that Dr Elangeshwaran, the PSU director, had authority to sanction only up to Rs 50 lakh of purchases. Naturally, the finance division of the Health Ministry objected to his order for buying measles seeds from Green Signal Bio Pharma. But the objection was overruled at the highest level in the Ministry, sources said.In another piece of damning evidence which clearly shows that the entire deal was executed to help the private company, it was decided that the PSU would produce measles vaccines from the seed and give away 70 per cent of the profit to Green Signal Bio Pharma.
The agreement was signed on November 27, 2007, and soon after Sundaraparipoornan withdrew Rs 2.5 crore. Though the Health Ministry's finance division recommended that the amount be recovered from Green Signal Bio Pharma, no action was taken. "Who is Sundaraparipoornan to supply measles seed? He is not an accredited vendor or manufacturer. No proof of purchase or source of origin of measles seed was supplied by him.
Till date it is not confirmed that the supply was a genuine measles vaccine," said a scientist with the Pasteur Institute on phone from Coonoor. "His factory has not yet started producing any vaccine. So he must be asked to explain his source of supply. Also, no WHO directions were applied by the apostles of WHO in the Health Ministry," the scientist added.Some other scientists pointed out several instances of free supply of measles seed to several private manufactures by the PSUs producing the measles vaccine.
In a Press conference on May 13, Health Secretary Naresh Dayal also justified free supply of vaccine seeds by the PSUs to private manufactures.The million-dollar question is why did the PSU go for such costly purchase and a lopsided agreement when seeds were available virtually for free from another PSU.
Report - 3
May 30, 2008 – “The Pioneer”
After Rs.3.25 cr for measles seeds, Health Minister’s associate to earn Rs.143 cr
Behind the Union Health Ministry's decision to close down vaccine production by three public sector undertakings (PSUs) and purchase of measles seeds by one of them from a private company at a highly inflated cost was a well-planned conspiracy to help a politically connected small-time entrepreneur.The Green Signal Bio Pharma (GSBP) Limited, a Chennai-based private company, is set to walk away with Rs 143 crore over the next three years in a "joint venture" with Pasteur Institute of India, Coonoor.
The PSU bought measles seeds from GSBP at a staggering Rs 3.25 crore and further agreed to give 70 per cent of the profit from vaccine manufacturing to the private company.Investigation by The Pioneer has shown that the "joint venture" was forged to squarely benefit the private company, which is owned by Sundaraparipoornan, a close associate of Union Health Minister Anbumani Ramadoss.
The measles seed, a raw material for vaccine production, was available free of cost at the Indian Immunologicals (Hyderabad), another PSU. "We could have easily provided the measles seed to Pasteur Institute at bare minimum cost as it is a fellow PSU," said an official working with Indian Immunologicals."The other option before the Government was to source the measles seed from Serum Institute, Pune, the existing private measles vaccine producer," he said. "
As the Serum Institute had received several seeds from PSUs free of cost with the concurrence of the Health Ministry, the Government could have negotiated for either free supply or persuaded them to charge nominal cost for the seed," the official said, adding, "We can't understand the role of Sundaraparipoornan. What is his credibility in supplying seeds, a critical part in vaccine production?"The GSBP had in September 2006 bought BCG seeds from BCG Vaccine Lab, a Chennai-based PSU, for just Rs 1.05 lakh. "It is baffling that a private company buys vaccine seeds for Rs 1.05 lakh and sells another vaccine seed for Rs 3.25 crore. Also, don't forget that both the PSUs were headed by Elangeshwaran," said the official.
Elangeshwaran had told The Pioneer that he was "arm-twisted" by senior officials in the Health Ministry to enter into the dubious deals.The official said that if the seeds were not available with any recognised Indian manufacturer, the Government should have consult WHO for a list of the accredited international suppliers. The source of measles seeds is Zagreb, the capital of Croatia. Sources said that Sundaraparipoornan has not supplied any proof of supply or source of origin of the measles seed that he sold to Pasteur Institute.
Scientists are not ruling out theft from Government laboratories. The deal was signed on November 27, 2006, in utter violation of Government rules. The Pasteur Institute floated no tender and agreed to the one-sided terms as dictated by Sundaraparipoornan. The institute first proposed a 60:40 profit sharing formula, but revised it to 70:30 on GSBP's insistence.Later, in a proposal to the Health Ministry (No. A 50011/156/2007-PIIC) on December 27, 2007,
Elangeshwaran sought Rs 17.80 crore for starting measles vaccine production and projected Rs 205 crore in profit over the next three years. The breakup is as follows: For 2008-09 -- Rs 17.3 crore; 2009-10 -- Rs 62.40 crore; 2010-11 -- Rs 62.48 crore; and 2011-12 -- Rs 62.55 crore.Seventy per cent of Rs 205 crore is estimated at Rs 143 crore, the staggering amount Sundaraparipoornan is set to make for providing measles seeds to the PSU.
That the deal between GSBP and Pasteur institute was totally illegal became clear when the integrated finance division of the Health Ministry pointed out that any proposal for new activity or scheme can be taken up by an autonomous body (like Pasteur Institute) only after it was approved, in particular, by the Planning Commission and related allocation made in the Budget.
"As per rules, such projects/proposals are required to be approved by the competent authority - ie Secretary (Health and FW)/standing finance committee/ expenditure finance committee - depending upon the amount of expenditure invested for a planned period," said the note (F.No V.11012/7/2005-CC&V) of the integrated finance division.
"Under these circumstances, the decision taken at the level of Director, PII, Coonoor, to initiate action for production of measles and rubella vaccines and purchase of seeds for the purpose appears to be premature. He is not competent to take such action," the note added. It also pointed out that Elangeshwaran had the authority to sanction deals only up to Rs 50 lakh, and recommended recovery of the Rs 2.5 crore which Sundaraparipoornan had withdrawn just two days after the deal was signed.Interestingly, since its inception in 1907, PII Coonoor was engaged only in the production of rabies vaccines for which it had earned a global reputation.
But while the Ministry directed it to close down rabies vaccine production on January 15, 2008, it simultaneously gave it the go-ahead for measles vaccine manufacturing, which would benefit the private company. The Ministry also ordered the closure of vaccine production by other two PSUs -- BCG Vaccine Lab, Chennai, and Central Research Institute, Kasauli.
The Pioneer faxed a questionnaire to Union Health Secretary Naresh Dayal (who is ex-officio chairman of PII, Coonoor), Dr Elangeshwaran and Sundaraparipoornan to seek their response to the above-mentioned controversial aspects of the deal. But even after two days, the Health Secretary and Elangeshwaran have not responded. Sundaraparipoornan has sent a reply through his advocate, refusing to answer any of the questions and threatening to start legal proceedings for reporting the issue.
Chain of events :
Nov 27, 2006: The Pasteur Institute of India (PII) purchases measles seeds for a whopping Rs 3.25 crore from Green Signal Bio Pharma (GSBP). The PSU agrees to give back 70 per cent of the profit from measles vaccine production over three years to the private company. Its chairman, Sundaraparipoornan, withdraws Rs 2.5 crore within two days of signing the deal
Dec 27, 2007: The Health Ministry receives a proposal asking for Rs 17.8 crore to start measles vaccine production and projects Rs 205-crore profit over the next three years. Of this, Rs 143 crore would go to the private company
Jan 15, 2008: The Health Ministry directs PII to stop rabies vaccine production. But measles vaccine production, which benefits the private player, not stalled
Violation of norms/rules :
No tender was floated for purchasing measles seeds.
Indian Immunologicals, a Hyderabad-based PSU which could have provided the seed either for free or at minimum cost, is not approached.
Integrated finance division of Health Ministry finds irregularities in the deal, but no follow-up action taken. It says the new project should have been approved by Planning Commission with prior budgetary allocationDespite the objections, clinic trials on at PII, Coonoor.
The Pasteur Institute director authorised to sanction expenditure up to Rs 50 lakh only, but signs Rs 3.25-crore dealsWhile signing the deal with PII, Sundaraparipoornan doesn't provide details of either proof of supply or source of origin of the measles seed
Report - 4
June 7, 2008 – “The Pioneer’
Health Minister blinks, orders vaccine probe
Sweetheart deal with associate's firm set to be scrapped
A sustained campaign by The Pioneer against the vaccine scam has finally stirred Union Health Minister Anbumani Ramadoss into action. The dubious joint venture for measles vaccine production between a Central Public Sector Undertaking (PSU) and a private company will now be investigated. Simultaneously, a committee will go into the possibility of restarting vaccine production by the PSUs who were asked in January to shut shop by the Health Ministry.
Well-placed sources in the Health Ministry said that Ramadoss held a detailed discussion with his senior officials late on Thursday and ordered an investigation into the "irregularities" in the controversial deal between Pasteur Institute of India (Coonoor), a PSU, and Green Signal Bio Pharma (GSBP).The Pioneer was the first paper to report that the PSU had purchased measles seeds from Green Signal Bio Pharma for an astronomical Rs 3.25 crore when these were available virtually for free from Indian Immunologicals Ltd, Hyderabad, another PSU engaged in measles vaccine production.
The one-sided deal also granted 70 per cent of the projected profit of Rs 205 crore earned from the joint venture to the private company for three years. Sources said Ramadoss asked the Ministry officials to keep the controversial deal in abeyance till the investigation is completed.
The Health Minister also constituted a three-member committee, headed by the Drugs Controller General of India, to explore the possibility of restarting vaccine production at the three Public Sector Undertakings (PSUs) who were directed in January to close production. The committee has been asked to submit the report before July 15.
The Minister has come under tremendous political pressure to revoke the directive banning vaccine production by the PSUs after allegations surfaced that he was playing into the hands of private vaccine manufacturers and international suppliers. The CPI(M) central committee had passed a resolution that the PSUs be revived. Its general secretary Prakash Karat, Politburo member Brinda Karat and Madurai MP P Mohan had asked Ramadoss to take urgent steps for restarting vaccine production by the three PSUs. The BJP had sought the Prime Minister's intervention in the matter while Tamil Nadu Chief Minister Karuananidhi and Himachal Pradesh Chief Minister Prem Kumar Dhumal had also asked Ramadoss to lift the ban on the PSUs and enable them to manufacture vaccines.
Sources also said that the meeting discussed the revelation of irregularities, asreported in The Pioneer, and that there was a realisation that the deal must be scrapped to prevent the matter from going to the court. "The deal will be scrapped as and when the investigation report is submitted," said an official.Green Signal Bio Pharma is owned by P Sundaraparipoornan, who is considered a close associate of the Union Health Minister in the political circles of Tamil Nadu.
How and why the PSU decided to purchase the measles seed, a critical part in vaccine manufacture, from GSBP -- which is neither an accredited vendor nor producer of measles vaccine -- is still a mystery? The private company did not produce any proof of origin or source of supply for the measles seed it delivered to Pasteur Institute.
The controversial deal was signed on November 27, 2006, and the private company withdrew Rs 2.5 crore within the next two days. Though the integrated finance division of the Health Ministry noticed and objected to the irregularities in July 2007, the Ministry never took any action. The finance division pointed out that the director of the Pasteur Institute was not competent to enter into the agreement as he had no power to sign any contract worth above Rs 50 lakh.
The division also recommended that the amount be recovered from Green Signal Bio Pharma, but the Ministry chose to take no follow-up action.The Pasteur Institute has been engaged in the production of rabies vaccine for more than 100 years. As measles vaccine production is a new project, it needs the approval of the Planning Commission besides budgetary provisions. But these norms were not followed and the finance division's findings were also ignored.
Dr Elangeshwaran, the then director of the PSU who signed the controversial deal, had told The Pioneer that he had been "arm-twisted" by top officials of the Health Ministry into helping private companies. He also said that immense pressure was put on him by the Health Ministry to close down vaccine production at the PSUs, a move that would benefit only the private companies.
The Pioneer investigation also revealed that the Ministry received a proposal from Dr Elangeshwaran on December 27, 2007, seeking Rs 17.8 crore to start the measles vaccine project which envisages a Rs 205-crore profit in three years. Within two weeks, the Ministry ordered that all vaccine production by the three PSUs -- Pasteur Institute of India in Coonoor, BCG Vaccine Lab in Chennai and Central Research Institute in Kasauli -- be suspended.
The only exception was made in the case of measles vaccine production, which benefited the private company.This came as a major shock as these PSUs were the main source of vaccine production for expanded immunisation programme in India. They used to meet 70 per cent of the nation's vaccine needs. The Pasteur Institute was manufacturing rabies vaccine for more than 100 years now.
Sequence of events :
November 27, 2006 : Pasteur Institute buys measles seed from Green Signal Bio Pharma for an astronomical Rs 3.25 crore. The company is neither an accredited vendor nor a producer of measles vaccine Measles seeds were available for free from Indian Immunologicals Ltd, Hyderabad, another PSU The PSU agrees to give 70% of the profit earned on measles vaccine production to Green Signal Bio Pharma for three years The firm withdraws Rs 2.5 cr within two days of signing the dealPSU director was not competent to sign deal above Rs 50 lakh
Planning Commission approval was not obtained for the project, nor was any budgetary allocation made
July 2007 : Integrated finance division reports to the Health Ministry on the illegal actions. Recommends that the Rs 2.5 crore be recovered from the private company
December 27, 2007 : The PSU director sends a project proposal to the Health Ministry for sanctioning Rs 17.8 crore for starting measles vaccine production. Projected profit for three years is Rs 205 crore, which ensures Rs 143 crore (70%) for the private company
"The Pioneer' had published series of reports on the vaccine scam and hidden agends behind it in May - June 2008.
[The writer is Special Correspondent of 'The Pioneer' daily]