Aircel-Maxis spectre back to haunt Chidambaram
CBI seeks details of deal’s audit from CAG
J Gopikrishnan
August 3, 2015 ‘The Pioneer’
In
a move that could spell trouble for former Finance Minister P Chidambaram, the
CBI has sought from the CAG details of its audit report in the Aircel-Maxis
deal exposing “undisclosed” and “illegal” fund flow of Rs1,255
crore to Aircel from Malaysian company Maxis.
While
the Foreign Investment Promotion Board (FIPB) had given approval for only
`3,514 crore of investment by Maxis in Aircel, the CAG’s P&T Audit wing
with the help of its counterpart auditors from Malaysia, has discovered that
Aircel got `4,769 crore from Maxis in clear violation of Foreign Exchange
Management Act (FEMA) and Prevention of Money Laundering Act (PMLA).
“During
the course of investigation of the above-referred case (Aircel-Maxis), it
transpired that P&T Audit Office had conducted audit of Department of
Telecommu-nications with reference to the Aircel-Maxis deal and had raised
certain audit paras/objections. In this context, the following
documents/information are required,” said CBI in a “Most Urgent” communication
to CAG in the first week of July.
The
CBI sought details of the audit report, audit paras/objections raised and also
replies from Finance Ministry and Department of Telecom. In its final finding
in January, the CAG’s P&T Audit wing observed that the FIPB approval to Aircel-Maxis
was a “mockery” of FDI norms. It also pointed out that communications from the
Finance Ministry in 2006 were “silent” on the value of the FDI flow in the
above deal.
It
also blamed Finance Ministry and DoT for allowing Maxis to acquire 99.3 per
cent of shares in Aircel in “secret ways.” During that period in 2006, foreign
companies were allowed to invest only 74 per cent in telecom companies.
Interestingly to the CAG’s query in this regard, the Ministry of Finance in
September 2013 said they had relied on the statement given by the Company
Secretary of Aircel.
Reiterating
the CBI’s earlier findings, the auditors also said that as FIPB Chairman
Chidambaram had no authority to approve any deal above `600 crore.
As
per the rule, any investment above Rs 600 core has to be approved by the
Cabinet Committee on Economic Affairs (CCEA). Despite this, the FIPB meeting
chaired by Chidambaram approved the Rs 3,500 crore worth Aircel-Maxis deal in
March 2006.
The
CAG auditors found that this was the only case in which Chidambaram gave FIPB
approval, while he referred all other similar cases to the CCEA. Under
Chidambaram, the Finance Ministry even sent Malaysian company Maxis’ subsidiary
Astro’s Rs 660 crore investment proposal in Sun TV Group to the CCEA for
approval. The CBI in its charge sheet against former Telecom Minister Dayanidhi
Maran, termed this investment as a quid pro quo from the Malaysian tycoon
Ananda Krishnan.
“Audit
further found that the letter of the Finance Ministry conveying the approval of
FIPB in March 2006 did not indicate the approved quantum (amount) of the
foreign investment i.e., upto which value the investment was to be made by
Maxis group in Aircel Ltd,” said the CAG’s audit wing.
It
was interesting to note that the Finance Ministry’s letter was dated March 20,
2006, and on the very next day Maxis invested Rs 3,514.35crore in Aircel. The
CAG in its findings has given a detailed chart on how Rs 4,769 crore has flown
from Maxis to Aircel.
The
auditors also found that the Finance Ministry’s communications to Aircel were
addressed to the c/o address of Amarchand Mangaldas & Suresh A Shroff &
Co. Incidentally, in December 2014, Chidambaram represented one of the
promoters of this firm in their legal battle of separation in Mumbai High Court.
In
its charge sheet in August 29, 2014 against Maran brothers and Maxis owners,
the CBI said that Chidambaram illegally gave FIPB clearance to Aircel-Maxis
deal. The charge sheet also said that probe in the illegalities in grant of the
FIPB clearances will be finished soon. In October, the Supreme Court (SC)
had ordered the CBI to submit a status report on the probe against Chidambaram
upon BJP leader Subramanian Swamy’s petition.
In
the first week of December, the CBI had interrogated the former Finance
Minister. However, the CBI Joint-Director Ashok Tewari, the officer who
summoned Chidambaram was unceremoniously shunted out to his parent cadre in
Himachal Pradesh within months.
Enforcement
Directorate (ED) had already attached Rs.750 crore worth of properties of Sun
TV in March. However, the ED has not yet launched prosecution proceedings
against the people involved for PMLA and FEMA violations in the Aircel-Maxis
scam. The SC is expected to hear the case next week.
