Tuesday, May 2, 2017

Aircel-Maxis Scam : All knew, Chidambaram didn’t

All knew, Chidambaram didn’t

J Gopikrishnan / Pioneer - OpED/ Feb 27, 2017

Former Finance Minister P Chidambaram was economical with the truth when he told the Central Bureau of Investigation (CBI) that he was not aware that Malaysian company Maxis’ investment in Aircel was above Rs 600 crore, when he approved the Foreign Investment Promotion Board’s (FIPB) recommendation on March 7, 2006. Chidambaram stated to this to the CBI when he was questioned on December 6, 2014. Certain senior Finance Ministry officials made similar statements to the probe agency.
This writer recently paid a visit to the Parliament library to check newspaper archives in a bid to understand what had been reported in the media during those days about Maxis’ takeover of Aircel. Every major newspaper in India had, on December 31, 2005, reported in a big way that Maxis was going to invest one billion dollars in Aircel. Some newspapers reported the exact value at $I.08 billion in headlines; some even converted the value in rupees (those days, a dollar was equivalent to Rs 45), saying that the foreign investment was Rs 4,700 crore. Business dailies splashed it on the front page and other newspapers reported prominently in their business section. They appeared on the same day after Maxis and Aircel conducted a joint Press conference in Mumbai on December 30, 2005, about the billion-dollar acquisition plan.
The photo montage of the main newspapers reports on December 31, 2005 is placed along with this article. Apart from Indian and Malaysian newspapers, international newspapers such as the Financial Times and the Wall Street Journal reported this deal in detail. An Internet search shows that television channels too widely reported the deal.
In January and February 2006 too, most newspapers were reporting regularly on the acquisition details and on the file movements at the FIPB. What was the basic illegality in the Aircel-Maxis scam? Those days, the FIPB could approve foreign investments up to Rs 600 crore. As per Rule (Finance Ministry Order dated February 18, 2003), the Finance Minister had to send the proposals above Rs 600 crore to the Cabinet Committee on Economic Affairs (CCEA). Then Finance Minister was the Chairman of CCEA too. The subsequent Maxis investment of Rs 675 crore in Maran family-run Sun TV group details had been sent by Chidambaram to the CCEA.
Why did Chidambaram did not send the proposal of Maxis’ investment in Aircel to the CCEA? Those days, Saudi Telecom had more than 25 per cent shares in Maxis. Saudi Telecom also has major shareholding in Pakistan Tele Communication Limited (PTCL) and our security agencies would have definitely objected Maxis’ entry in India, if the file reached the CCEA.
Newspapers had reported that Maxis was going to invest Rs 4,700 crore on December 31, 2005. But Maxis, in its application to the FIPB on January 25, 2006, stated only $800 million (Rs 3,600 crore) of investment in Aircel. Now, the  Comptroller and Auditor-General’s P&T Audit wing found that the actual money which had come to India was Rs 4,769 crore from Maxis. Where did the balance of Rs 1,200 crore disappear?
What is the CBI doing with these open-and-shut findings? The CBI was trying limit the case to former Telecom Minister Dayanidhi Maran, based on a doubtful complaint by Aircel promoter C Sivasankaran, who alleged that Maran arm-twisted him into selling Aircel to Maxis. The December 31, 2005, news reports in the media exposes that both Sivasankaran and the Maxis owners conducted Press conferences in Mumbai to announce the billion-dollar acquisition deal. This shows that everyone in the Finance and the Telecom Ministries was aware of the deal’s amount. The question then is: Why had the CBI believed in Sivasankaran’s theory of arm-twisting in April 2011. The Congress was enjoying the diminishing profile of alliance partner DMK, when A Raja and Kanimozhi were allegedly involved  in the 2G scam.
But the Aircel-Maxis scam took a different turn, when BJP leader Subramanian Swamy, in April 2012, came out with money trail of Rs 26 lakh to companies linked to Chidambaram’s son Karti, and blatant FIPB violations. Apart from the violation of not sending the file to CCEA, Maxis also lied to the Indian authorities. Those days, a maximum of 74 per cent was the limit of foreign investment in telecom companies. But after the illegal FIPB clearance, Maxis declared to the Malaysian Stock Exchange that it had acquired 99.3 per cent shares in Aircel by striking an alliance with a Chennai-based hospital group of companies. This shows that Sivasankaran was perhaps illegally offloading his entire shares to Maxis. It’s astonishing that the country’s premier probe agency believed his story of arm-twisting.
Another big fraud was the stark variation in the valuation of shares. 74 per cent of Aircel was valued at around Rs 3,600 crore and the rest 26 per cent was valued at a pittance of around Rs 30 crore! The CAG’s finding in 2015 of the actual money flow of Maxis of Rs 4,769 crore shows that around Rs 1,200 crore came to India was nothing but black money or kickbacks as part of the deal.
 In a nutshell, all, including Chidambaram, Maran, Sivasankaran and Maxis owner T Ananda Krishnan, were allegedly part and parcel of a dubious deal to mislead Government of India, violating provisions of the Prevention of Corruption Act and the Prevention of Money Laundering Act.   
After Chidambaram and son Karti’s names cropped up, the CBI went into silent mode, leading to Maran’s discharge from ‘arm-twisting’ charges, by the 2G court. While declaring Chidambaram’s ‘illegalities’ in the deal in the chargesheet in August 2014, the CBI never provided proof to the court.  The joint raid of the Enforcement Directorate (ED) and the Income Tax department unearthed two-lakh-dollar money flow from Maxis’ three subsidiary companies to Karti’s company, Chess Management Services Private Limited. The raid also exposed 21 secret foreign bank accounts of Karti Chidambaram and companies linked to him, and their huge assets, hotels, vineyards and farm houses in 14 countries. The question is: What has prevented our agencies to act on these stunning details of black money allegedly stashed by Chidambaram’s family? 
The Central Bureau of Investigation is now acting as a mute spectator in Subramanian Swamy’s case in the Supreme Court. The apex court’s main question to Swamy is: Was Chidambaram aware that the deal was above secret 600 crore when he illegally approved it in March 2006? Newspaper reports detailed it on December 31, 2005, and subsequent reports in January and February 2006 wrote of it. The entire world was aware of this billion-dollar deal. It cannot be believed that Chidambaram was unaware of of the fact that the amount exceeded the limit for approval at his end.  

(The writer is Special Correspondent, The Pioneer)

Aircel- Maxis Scam - CBI - Caged parrot refuses to speak

Caged parrot refuses to speak

J Gopikrishnan / Pioneer - OpED/ Feb 14, 2017

The Aircel-Maxis scam was the invention of the Central Bureau of Investigation in mid-April 2011, when the 2G scam case against former Minister for Telecommunications A Raja was rocking the country. Certain media houses began flashing the name of former Telecom Minister Dayanidhi Maran, who also fell into the CBI’s net. Details of complaints filed by Aircel founder C Sivasankaran, who accused Maran for “arm-twisting” him to sell his company to Malaysian conglomerate Maxis Group, also came in. Those days, on a daily basis, the Supreme Court’s 2G Bench was hearing the case, and the Congress-led UPA Government was at the receiving end.
On July 7, 2011, CBI counsel KK Venugopal declared in the apex court that the agency found “there was an element of coercion” from Maran’s side in the selling of Aircel to Maxis. And, Maran was forced to give his resignation from the Union Cabinet. In September 2011, the CBI filed a detailed FIR in the 2G court. The DMK was then in the dock.
But the tables turned against the Congress in the Aircel-Maxis scam, when in April 26, 2012, BJP leader Subramanian Swamy exposed the role of Finance Minister P Chidambaram, and Rs 26 lakh money trails to his son Karti’s companies. The Aircel-Maxis scam started from the dubious FIPB (Foreign Investment Promotion Board) approvals granted by Chidambaram in early 2006.
The revelations sent the CBI’s case against Maran into a deep freezer. At one point, CBI officers even wrote, “No case”, against Maran. The CBI officers’ opinion was overruled by Attorney General Mukul Rohatgi in mid-2014. After this, the CBI filed a chargesheet against Maran and his brother heading the family firm, Sun TV Group, and Maxis owners in August 2014.
During this period, a curious deal  happened. The Maran family sold its Spice Jet airlines to its earlier owner Ajay Singh. This deal was in violation of the Securities and Exchange Board of India guidelines, as there were no open offers. The dispute has reached the Delhi High Court. In the chargesheet against Maran, the CBI detailed the violations of Chidambaram in granting the FIPB approval to Maxis. The CBI declared it would soon file a supplementary chargesheet. It interrogated Chidambaram in December 2014. The main illegalities in the FIPB approval in Aircel-Maxis scam are:
1. Those days, the FIPB had the power to approve Rs 600 crore worth foreign investment. Above this limit, the proposal filed had to go to the Cabinet Committee on Economic Affairs (CCEA) for approval. Maxis, in its application to the FIPB, said its investment was $800 million (Rs 3,600 crore).
Chidambaram cleared the FIPB approval and did not send the proposal to the CCEA. This was perhaps the lone case not sent to CCEA by Chidambaram in his career as Finance Minister. He sent the Rs 675-crore FIPB-cleared file of Maxis Group’s investment in Maran family’s Sun TV Group to the CCEA in January 2007.
2. Maxis, in its application to the FIPB said it was acquiring 73.99 per cent shares of Aircel. Those days, the maximum foreign investment permitted in telecom sector was 74 per cent. But Maxis declared to the Malaysian Stock Exchange that it had acquired 99.93 per cent in Aircel. So, Maxis was actually cheating the Indian Government.
3. The 74 per cent of the Aircel shares were taken over for Rs 3,600 crore. Shockingly, the rest 26 per cent was sold at just Rs 28 crore!
4. Now, the Comptroller and Auditor-General found that, though illegal FIPB approval was for Rs 3,600 crore, but the actual money flow from Malaysia was more than Rs 4,900 crore! Where has this extra Rs 1,300 crore gone?
But, after declaring Chidambaram’s illegalities in the chargesheet against the Maran brothers in August 2014, nothing happened from the CBI side, and the agency never came back to the 2G court, leading to the Maran brothers’ discharge from the case this February. The Maran brothers were always contradicting the curious arm-twisting theory of the CBI, citing Chidambaram’s FIPB approval.
The 2G court judge OP Saini’s very lengthy discharge order relies on the CBI’s lack of evidences on the arm-twisting theory targeting the Marans. It’s another question as to why the judge went for the framing of charges procedure, although the CBI had not provided the promised evidence against Chidambaram. He should have asked the CBI to clarify this matter.
The CBI’s silence in alerting the judge about this aspect is also intriguing. There is another question: Why did the judge speed up the discharge order, when, based on advocate Prashant Bhushan’s petition, the Supreme Court had begun acting against the Maxis owners, when they were in the process of selling Aircel to Reliance Communications and spectrum-sharing arrangements with Airtel?
The CBI is the villain in these developments. All the corrupt forces in the country muzzled have CBI. Ashok Tiwari, then Joint Director of the CBI, who summoned Chidambaram in December 2014, was unceremoniously removed from the agency. CBI Director Anil Sinha prevented him from questioning Chidambaram, leaving the interrogation to junior officers.
Within days, Tiwari was shunted out to the redundant ‘Rajiv Gandhi assassination conspiracy’ case studying division; subsequently he was thrown out from the CBI and despatched to his parent cadre. Now, Tiwari is the Managing Director of Himachal Pradesh Road Transport Corporation. Enforcement Directorate’s (ED) Investigating Officer Rajeshwar Singh too was shunted out from the organisation for probing money trails to Karti Chidambaram’s firms. The Ministry of Finance even misled the court, that the probe in the Aircel-Maxis case was over and that there wasn’t any need of the services of Rajeshwar Singh, in July 2014!
After Swamy’s petition, the Supreme Court intervened to post him permanently in the ED. After raids, the ED found two lakh dollar money trails from three Maxis Group companies to Karti’s company, Chess Management Services Pvt Ltd. Karti has not yet appeared before the ED, even after he was issued three summon notices. Why was he not arrested for repeatedly evading summons? .
Now, the Supreme Court has asked petitioner Swamy to provide certain documents. What the court wants to know is, whether Chidambaram was aware that Rs 600 crore was the FIPB’s limit. The Ministry of Finance’s order dated February 18, 2003, clearly stated Rs 600 crore was the limit and that Minister had to sent the FIPB files above this limit to the CCEA.
With such evidence, why is the CBI not acting on the sham FIPB approval in the Aircel-Maxis scam. Why is it waiting for the court’s direction, which is sitting on Swamy’s petition since May 2012.

(The writer is Special Correspondent, The Pioneer)