Monday, June 4, 2012

Aircel-Maxis deal and Chidambarams

[These series of articles on Chidambarams link in Aircel-Maxis deal appeared in 'The Pioneer' on April-May 2012]

Swamy claims PC used clout to benefit son

April 27, 2012

Janata Party president and 2G scam crusader Subramanian Swamy has alleged that Home Minister P Chidambaram used his office as Finance Minister in 2006 to help his son Karti get a portion of the booty in the Rs 4,000 crore Aircel-Maxis deal. Swamy has asked Prime Minister Manmohan Singh to dismiss Chidambaram from the Union Cabinet and direct CBI to bring the father-son duo under the ambit of on-going probe in the Aircel-Maxis deal.

Addressing a Press conference on Thursday, Swamy released documents of Registrar of Company (RoC) pertaining to “Karti-controlled companies”, and alleged that Foreign Investment Promotion Board (FIPB) under Chidambaram cleared the Rs 4,000 crore Aircel-Maxis deal only after his son got “five per cent shares in C Sivasankaran’s Aircel Televenutre Ltd”.

Meanwhile, according to PTI, Karti Chidambaram has dismissed Swamy’s charges. “There is no no truth. None of the companies in which Karti has any interest holds any equity in nor has given any loan to any telecom company,” sources close to Karti said.

Producing a set of documents, Swamy claimed that Karti has 94 per cent shares in a company called Ausbridge Holdings Investments Pvt Ltd, which has majority stakes in two other companies, namely Advantage Strategic Consulting Pvt Ltd and Kaiser Surya Samudra Resorts Pvt Ltd.

Swamy said RoC documents of Advantage Strategic Consulting Pvt Ltd, showed that before March 31, 2006, it had transferred Rs 26,00,444 to Siva’s Aircel Televentures Ltd as loans and advances. “This payment was obviously made to acquire shares of Aircel Televentures, which controlled the Aircel Ltd and Aircel Cellular Ltd,” he said.

What is bizarre is the fact the loan amounted to Rs 26,00,444 where as in normal cases such transaction should have been a round figure.

After Maxis acquired majority stakes in Aircel by paying Rs 4,000 crore to the holding company Aircel Televentures, the latter changed its name to Siva Ventures Ltd. Swamy said that for its five per cent shares, Karti’s company must have pocketed Rs 200 crore from this Malaysian booty.

“Chidambaram approved the FIPB clearance of Aircel-Maxis deal in May 2006 after his son got around five per cent shares in Siva’s company. The accounts of Siva Ventures showed that after the transfer of money from Maxis, the company gave a loan of Rs 1,300 crore to certain associate companies without specifying their names. This is a mystery. Where did such huge amount go?”

In a letter to the Prime Minister seeking dismissal of Chidambaram, Swamy said that CBI’s ongoing probe in the Aircel-Maxis deal is limited only to Maran brothers. “During March first week this year, at a Press conference in Chennai, I announced the names and details of several companies where Karti P Chidambaram is a director. Within few days on March 9, 2012, Karti resigned from the Directorship of one company called Ausbridge Holding and Investments Pvt Ltd, where he had more than 94% shares.

“After I checked the accounts of this company, I found that his company has majority shares in two companies, namely : Advantage Strategic Consulting Pvt Ltd and Kaiser Surya Samudra Resorts Pvt Ltd. The accounts of these companies were totally manipulated and some Balance Sheets were filed even after five year,” wrote Swamy to Prime Minister in his three-page letter detailing the “doubtful financial transactions of list of Karti controlled companies and their dubious operations.”

“It is not possible for the CBI officers who mainly belong to IPS cadre to probe into Home Minister and his son’s role, even though they have solid proof. In the ongoing probe on the Aircel-Maxis deal, where CBI had registered FIR, the role of P Chidambaram and his son Karti should also be through probe. Such kind of impartial probe is not possible for CBI Officials, when P Chidambaram is Home Minister, who controls their cadre-IPS,” said Swamy.

The 2G crusader announced that he would soon approach courts, demanding to probe Chidambaram and son. “My case is reserved for orders on making him as co-accused along with A Raja in Supreme Court. Now I have produced Chidambaram’s son’s financial transactions during the Aircel-Maxis deal period. If CBI can fix Karunanidhi’s daughter for having financial transactions with Balwa related company, the same rule will apply to Chidambaram’s son also. CBI is aware of Karti’s link in the Aircel-Maxis deal. That is why they are going slow in Maran case,” said Swamy.

Swamy also produced the RBI’s monthly report for the month of September 2011 about outward FDI flow. According to this report, Advantage Strategic Consulting Pvt Ltd has a wholly owned subsidiary in Singapore, named as Advantage Strategic Consulting Singapore Pte Ltd. The report shows a transaction of 1.8625 Million US dollar from Indian parent company to Singapore based subsidy. “This is only a transaction of just a month. I had sought RBI for the entire transaction from 2006. These huge transactions are not shown in the RoC documents of Indian company,” he said.

Swamy also produced documents of another “Karti controlled company” Kaiser Surya Samudra, which owns 4.62 hectares near the Mahabalipuram beach, near Chennai. “This transaction took place during Kanimozhi’s financial transaction with Balwa during 2008-2009. This company got approval from Karunanidhi government in lighting speed in the sensitive beach resort to construct 100 luxurious room,” alleged Swamy.

“But the RoC documents are silent on the source funds of this Rs.100 crore worth project. It shows only a pittance of Rs.1.5 lakh as loan from Home Minister’s wife Nalini Chidambaram,” added Swamy, urging Tamil Nadu Chief Minister to order a probe on the huge land purchase in the sensitive beach area.

Ministry babus roped in for propaganda

April 28, 2012

While Home Minister P Chidambaram continued his stony silence on Friday over Janata Party president Subramanian Swamy’s allegations against him and his son Karti on Aircel-Maxis deal, the Home Ministry’s Media Wing distributed a Press release on behalf of a Chartered Accountant representing a company allegedly controlled by Karti. Swamy has alleged that this company benefitted from the deal.

Interestingly, the handout of the Chartered Accountant distributed from the Home Ministry’s North Block office also included a PTI report on the CA’s version on Swamy’s allegations and plans to file a defamation case.

The journalists were asked to collect CA’s version from the MHA media wing’s office. The officials who called the reporters refused to fax or email the handout. Obviously, this was a clever ploy to avoid any proof of Home Ministry’s involvement in putting out Karti’s defence.

The Press note was signed by R Balachandran, Chartered Accountant of Advantage Strategic Consulting Private Ltd. This company was controlled by another company called Ausbridge Holdings and Investments Private Limited, where Karti has more than 94 per cent shares. Swamy alleged that the Advantage Strategic Consulting Pvt Ltd “got five per cent stakes in C Sivasankaran’s company to share the booty of Rs 4,000 crores from sell of Aircel.”

“My client M/s. Advantage Strategic Consulting Private Limited had taken notice of the press meet held by Mr Subramanian Swamy, on April 26, 2012. The company states that they have placed the matter in the hands of their lawyers to take appropriate legal action immediately,” said R Balachandan, the Chartered Accountant. The questions is why Home Ministry officials were forced to distribute the press note of a private person, while the Government of India rules of conduct of civil servants strictly prohibit such activities.

Meanwhile, ridiculing the “defamation notice threat”, Swamy, said that he would welcome it as opportunity cross-examine Karti in the court of law. Swamy also said that he would soon reveal more documents on “Nalini Chidambaram (Home Minister’s wife) and Karti link in Aircel-Maxis deal”.

“The threat of a defamation case issued by company officials on behalf of Mr Karti Chidambaram with regard to my allegation of his involvement in the 2G Spectrum Scam is laughable. I would welcome an opportunity to cross-examine Karti in the court of law which will save me the trouble of approaching the Special 2G Spectrum court for filing a fresh private complaint.

“In the meantime I demand that the mother and son duo of Mrs Nalini Chidambaram and Karti to explain the number of trips they have made to Malaysia during 2005-2007, and whether the CEO or any other official of Maxis received them and put them in hotels,” said Swamy in statement issued here.

Govt’s defence of Chidambaram rings hollow

May 8, 2012

The Government’s claim that as Finance Minister, P Chidambaram did not delay Foreign Investment Promotion Board (FIPB) approval to the Rs 4,000 crore Aircel-Maxis deal is far from the truth. While the actual clearance was given on October 3, 2006, the Government on April 28 claimed that FIPB cleared the Maxis acquisition of Aircel on March 7, 2006 itself.

The Government’s latest defence of the Home Minister came in response to Janata Party president Subramanian Swamy’s allegations that under Chidambaram as Finance Minister in 2006, the FIPB sat on the Aircel-Maxis deal for several months.

Dismissing the allegations as “totally baseless”, the Ministry of Finance on April 28 said the FIPB recommended the proposal to acquire Aircel in the meeting held on March 7, 2006 and a formal letter of approval by the Ministry was issued on March 20, 2006.

“From the fact stated above, it will abundantly clear that there was no delay whatsoever. It is unfortunate that the baseless allegations should be made without verifying facts,” said the Ministry of Finance on April 28 giving the entire timeline of approval.

However, inquiry by The Pioneer revealed that it was the Government, which either did not verify the facts or deliberately concealed it to save Chidambaram.

The documents show that the FIPB recommended the deal only on October 3, 2006 in its meeting chaired by Chidambaram and the related Press release was issued only on October 17, 2006.

The documents available with The Pioneer and Press releases on the FIPB approvals, still available on the website of Press Information Bureau, have put the Government in a spot. No one from the Finance Ministry has come forward to respond to clarifications sought by The Pioneer through an email questionnaire sent five days ago to the Joint Secretary of Infrastructure of Investment division, who heads the FIPB.

A senior official of the FIPB said: “Please don’t drag us into this politically sensitive issue.”

Coming out with a fresh expose into the deal where former Telecom Minister Dayanidhi Maran’s role is under CBI probe, Swamy alleged that a company controlled by Chidambaram’s son Karti got five per cent stake in Sivasankaran’s Aircel Televentures to corner part of Rs 4,000 crore that the Maxis paid for 74 per cent stake in Aircel.

It was alleged that Chidambaram withheld the FIPB clearance to the deal till his son got the five per cent shares in Siva’s company.

Reacting to the allegations, the Finance Ministry issued a detailed Press release titled — “Government denies allegations.”

“Allegations have been made that the proposal of M/s Global Communication Services Holdings Ltd, Mauritius (a wholly owned subsidiary of M/s Maxis Communications Berhad) to acquire 73.99 per cent equity in M/s Aircel Ltd was delayed by the then Finance Minister in order to benefit certain persons.

“On 7.3.2006, the matter was placed before the meeting of the FIPB. DoT conveyed its support to the proposal at the meeting. FIPB recommended the proposal for approval on 7.3.2006 and file was moved by Deputy Secretary on 10.3.2006. The minutes of the FIPB meeting were placed before the then Finance Minister on 13.3.2006 and he approved the same. The formal letter of approval was issued by the Ministry of Finance on 20.3.2006. From the facts stated above, it will be abundantly clear that there was no delay whatsoever. It is unfortunate that baseless allegations should be made without verifying the facts,” claimed the Government Press release. According to this Press release, the FIPB, under Chidambaram, approved the proposal in just two-and-a-half months.

But The Pioneer’s investigation shows that no such proposal was tabled in the March 7, 2006 meeting of the FIPB. A Press release dated March 14, 2006 still on the PIB website, has no mention of the Aircel-Maxis deal.

The vital information that Government concealed is that at the March 7, 2006 meeting of the FIPB, clearances were given to another company with a similar name. The company was BT Global Communication (Mauritius) Ltd.

It was only on October 3, 2006 that the FIPB meeting, chaired by Chidambaram, cleared the deal. Item number 15 and 16 of the October 17, 2006 Press release available at the PIB website states about the FIPB clearance to the Maxis investment in Sivasankaran’s companies Aircel and Dishnet.

The FIPB also did not show the amount of foreign investment and kept the concerned column blank. Normally, all FIPB clearances would specify the value of foreign investment.

Govt trapped in own web of deceit

May 9, 2012

The UPA Government finds itself caught in a web of deception in its bid to defend Home Minister P Chidambaram’s role in the Aircel-Maxis deal. On Tuesday, reacting to The Pioneer report on the gross discrepancies on the FIPB approval timing and delay of Aircel-Maxis deal, the Government insisted that the first approval was given on March 7, 2006 and second one for downstream investment on October 3, 2006. Maxis’ subsidiary of Mauritius-based Global Communication Services Holding Ltd invested in Aircel, as claimed by the Government.

However, records nail the Government lie. The facts remain that on March 7, 2006, the Government gave approval to two companies — from USA and Singapore — to raise their stake in Aircel/Global Communication Services Holding Ltd, both Indian firms.

This is established by a PIB Press release dated March 14, 2006 which states that under ‘Economic Affairs’ category (item no : 7 of the PIB Press release on FIPB approvals), M/s Century Telephone Enterprise Inc of USA and M/s Rediongton Pte Ltd were given sanction to enhance their foreign equity of 49 per cent in Aircel/Global Communication Services Holding Ltd to 74%. The value of foreign investment was shown as only Rs 180 crore. Curiously, in this case, Global Communication Services Holding Ltd is shown as an Indian investor along with Aircel.

The PIB release dated March 14, 2006 has no mention of Global Communication Services Holding Ltd acquiring any stake in Aircel. The Pioneer on Tuesday reported that the FIPB approval for the acquisition of Aircel by Global Communication Services Holding Ltd was given only on October 3, 2006.

While insisting that the first FIBP clearance was given to deal on March 7, Government’s Tuesday release claimed that on October 3, FIPB gave subsequent approval for downstream investment by Global Communication Services Holding Ltd in Aircel.

But, throughout the controversy, the Government has not come out with any documents to show that the FIPB under Chidambaram on March 7 gave any clearance to Global Communication Services Holdings Ltd to make any investment in Aircel. Unless the Government comes out with clear evidence to establish this, Chidambaram will find it difficult to deny allegations levelled by the Opposition that he purposefully delayed the clearance to benefit his son Karti.

Terming The Pioneer report on Tuesday as “factually incorrect and totally baseless” the Government on behalf of Ministry of Finance reiterated that FIPB chaired by Chidambaram as Finance Minister approved the deal on March 7, 2006. “Government had earlier issued a Press release on April 28, 2012 regarding the foreign investment made by M/s Global Communication Services Holdings Ltd, Mauritius to acquire 73.99 per cent equity in M/s Aircel Ltd. The contents of that statement are correct and are reiterated,” said the Press release titled “Clarification on AIRCEL issue”.

The Government must also clarify on the companies — Century Telephone Enterprise from USA and Rediongton Pte Ltd. According to the CBI FIR, Maxis invested around Rs 4,000 crore in Aircel by May 2006. Then how did FIPB arrive at foreign investment figure of just Rs 180 crore for increased 25 per cent shares?

Meanwhile, on the same day, March 7, 2006, FIPB under “Telecommunication” category (item No: 19) approved foreign investment of similar named company called BT Global Communication (Mauritius) Ltd. This company got approval to acquire 74 per cent in an unnamed Delhi-based company’s landline telephone operations for around Rs 9 crore.

It is also a mystery how in October 3, 2006, Global Communication Services Holdings Ltd, which was shown as an Indian entity on March 7, became a foreign investor in Aircel and Dishnet on October 3.

Maxis’ stake declaration demolishes PC defence

May 15, 2012

For days Home Minister P Chidambaram has pleaded innocence in the Aircel-Maxis deal, but new facts show that the acquisition of Aircel by the Maxis in 2006 was illegal. The deal, which took place when Chidambaram was the Finance Minister, violates Indian laws. While domestic laws place a cap of 74 per cent on foreign investment in telecom sector, in the Aircel-Maxis deal, the latter acquired nearly 100 per cent stake in three tranches.

Equally shocking is the fact that a probe instituted by the Finance Minister and Department of Telecom in early 2007 to look into this violation, has reached nowhere. The Government has so far not initiated any action against Maxis.

On March 15, 2006, Maxis declared to the Malaysian Stock Exchange that it proposed to acquire 99.714 per cent in Aircel. This was before the Foreign Investment Promotion Board (FIPB) — under Chidambaram — cleared the so-called final acquisition on October 3, 2006.

“Aircel Transactions comprising:

(I) Proposed acquisition by Global Communication Services Holdings Ltd (GCSHL), a wholly-owned subsidiary of Maxis, and Deccan Digital Networks Private Limited (JVC), a proposed joint venture company of Maxis in the Republic of India, of 94,864,865 and 85,135,135 equity shares of 10 Indian Rupees each in Aircel Limited (Aircel), a company incorporated in the Republic of India (“Aircel Shares”), representing 39% and 35% respectively, of the enlarged issued and paid-up share capital of Aircel from Aircel Televentures Limited for a cash consideration of $422 million and $378 million respectively.

(II) Proposed joint venture between GCSHL and Sindya Securities & Investments Private Limited in relation to their participation in the JVC.

III) Proposed put and call options over GCSHL’s 63,243,243 Aircel Shares representing 26% of the enlarged issued and paid-up share capital of Aircel for a cash consideration of US$280 million (“collectively Aircel Transactions”),” said the declaration made by Maxis to Malaysian Stock Exchange (Bursa Malaysia) on March 15, 2006.

Maxis filed this declaration to stock exchange through their banker RHB Sakura Merchant Bankers. This declaration shows that Maxis proposed to purchase Aircel shares in three tranches --- first 39 per cent and then 35 per cent and last 26 per cent, at around Rs 4,000 crore. But another document filed by the Maxis to the Malaysian stock exchange says the last tranche was proposed to be of 25.714 per cent share in Aircel.

The declaration also shows that apart from direct purchase, Maxis acquired Aircel shares through Joint Ventures with Deccan Digital Networks Private Ltd and Sindya Securities and Investments. These two Indian companies were controlled by Sunita Reddy, who belongs to Appolo Hospital Group.

The Maxis declaration itself could be a prima facie evidence to cancel the license of Aircel, apart from initiation of cases for cheating the Government. But even after six years of the deal, the Government has not acted on it. Reacting to violation of the Indian law by Maxis, Chidambaram said in the Rajya Sabha on Monday, “Let law take its own course.”

Maxis CEO stares at arrest, Interpol Red Corner Notice

May 21, 2012

In a new twist to the controversial Aircel-Maxis deal, the Indonesian Police has issued arrest warrant against Ralph Marshall, the CEO of Maxis Group and Astro All Asia Network. Ralph Marshall’s name figured as accused in the CBI’s FIR along with former Telecom Minister Dayanidhi Maran.

Indonesian newspapers, quoting top National Police official Brig M Taufik, recently reported that Marshall’s name figures in the Wanted List for cheating, forgery, fraud and money laundering.

Marshall, a Sri Lankan of Tamil origin, holds Canadian citizenship and is residing in Malaysia. He is considered No 2 in the vast business empire floated by the Malaysian tycoon T Ananda Krishnan, popularly known as TAK. Both figured as No 3 and No 4 in the CBI’s FIR along with Maran brothers in the Aircel-Maxis deal.

According to CBI, for facilitating the acquisition of Aircel by Maxis, Maran brothers received quid-pro-quo through Maxis subsidiary Astro. This company later invested around `600 crore in Maran brothers controlled Sun Networks, CBI’s FIR says.

“Headquarters of the Indonesian National Police (Police Headquarters) confirmed that the Chief Executive Officer (CEO) Astro Malaysia, Ralph Marshall, entered the Wanted Persons List (DPO ) related to cases of alleged criminal forgery. Determination of DPO was issued since 18 April 2012 through a letter numbered DPO/05/IV/2012/DIT General Crime (Pidum) signed Ari Dono Sukmanto Brig,” reported Indonesian newspapers Republica and Antara News, quoting Chief of Bureau of Public Information Headquarters, Brig M Taufik.

In Indonesia, Wanted Persons List is known as DPO (Daftar Pencarian Orang) and it is issued on fugitives after police fails to arrest them.

The Indonesian Police officials also said hey have already sent arrest warrant against Marshall through diplomatic channels to Malaysia. The top cops also added they would soon approach Interpol to issue Red Corner Notice against “fugitive Marshall” to force the member countries to arrest him.

The same was confirmed in Malaysian newspapers like The Edge, Business Times and The Malaysian Insider. “Indonesian Police are looking to arrest Ralph Marshall, the right hand man of Malaysian multi-billionaire T Ananda Krishnan, over fraud and money laundering charges,” reported The Malaysian Insider, adding a report on the forthcoming revamp of Maxis Group following criminal charges faced by Marshall.

Astro All Asia Networks is the subsidiary of Maxis and have shareholding in several media organisations across the continent including India. Astro has entered into an alliance with Indonesian media company Lippo Group and also has sizeable shares in it.

The problem started when Astro sold its shares to Saudi Global telecom, without consulting the Indonesian partner Lippo. The Indonesian police have charged Marshall with money laundering, fraud and forgery cases and sued him for a compensation to the tune of $300 mn.

“Their (Indonesian government) calculation is that if they can exploit the criminal law to cause confusion and fear, they can avoid paying the damages,” Astro’s lawyer Hafzan Taher said in the statement, reported by the Malaysian newspaper Edge.

CBI, which registered FIR, eight months ago has not been able to question foreign nationals Ananda Krishnan and Marshall. Last week, a CBI team visited Malaysia and sources say Attorney General of Malaysia promised “all help” in relation to Aircel-Maxis deal.

However, the probe on Maxis violating the Indian foreign investment rules has reached no where. According to norms, maximum permissible level of foreign investment in telecom sector is 74 per cent. Contrary to the FIPB records, Maxis’ declaration to Malaysian stock exchange reveals that they have acquired almost 100 percent shares in Aircel in violation to Indian laws.

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