Hectic lobbying to increase gas price to provide bumper to Reliance Industries Limited

GOVT WANTS TO HIKE GAS PRICE, HELP RIL; MINISTRIES RESIST

J Gopikrishnan / New Delhi

May 30, 2013

As the countdown has started for the end of the UPA Government, a move is underway to sharply increase the price of the indigenously produced natural gas. A Cabinet note shows that a section of the Government wants to bring the domestic price on a par with international rates. The move, which would come as windfall for Mukesh Ambani’s Reliance Industries Limited (RIL), has triggered sharp differences among various Ministries.

According to the note prepared by the Petroleum Ministry for consideration of the Cabinet Committee on Economic Power Ministries are opposed to any price hike, the Finance and Petroleum Ministries and Planning Commission are and Planning Commission varies (Million Metric British Thermal Units) and $14 per mmbtu.

The note released by CPI veteran leader Gurudas Dasgupta last week to the media clearly shows that Fertiliser and Power Ministry are opposing the hike citing national interest and fearing huge loss to exchequer.

Fertilizer and Power sector are the major consumers of natural gas. According to Dasgupta, the rate suggested by Finance, Petroleum and Planning Commission reflects the wishes of Mukesh Ambani’s RIL, which will be major beneficiary of the largesse. At present the Government is purchasing gas at the rate of $4.2 per mmbtu. This rate was fixed by an Empowered Group of Ministers (eGoM) few years back.

In a series of letters to Prime Minister Manmohan Singh, CPI(M) leader and member of the Standing Committee on Petroleum and Natural Gas Tapan Sen has pointed out that the current price of $4.2 per mmbtu itself is a bonanza to the RIL. In his letters, Sen pointed out that the RIL quoted $2.4 per mmbtu for supply of gas to NTPC in an international competitive bid.

The current controversy started after the Rangarajan Committee recommended a high rate of $8.2 per mmbtu for the purchases of domestically produced gas from April 2014, with provisions of specific increases in each stage in the coming five years. The committee’s report was submitted in December 2012. In India , the major gas producers are public sector undertakings ONGC and Oil India with around 60 per cent of total output, and the major private player is RIL, which started controlling the sector after its production started from KG Basin. According to the estimates of Petroleum Ministry, by 2016-17 the private players will control more than 50 per cent of the domestic gas production in India .

The Fertilizer and Power sectors will be hit hard in case of increase in the price of the gas from current level of $4.2 per mmbtu. Petroleum Minister Veerappa Moily’s arguments that the increase in price of gas would earn more revenue to the public exchequer were totally untenable as the Government had to shell out huge subsidies in Fertilizer and Power sector.

Moily’s arguments that ONGC and OIL India would benefit more did not take into account the fact after gas price hike, the Government would be required to pay huge subsidies in different sectors, which The ultimate beneficiary would be the private gas producing contractors, who wants to get money in dollars for a domestic production.

Is the UPA Government ignoring the interest of the nation over corporate interests?

[The report was published in ‘The Pioneer’ on May 30, 2013]

RAM TERI GANGA MOILY!

J Gopikrishnan / New Delhi

March 18, 2013

Union Petroleum Minister M Veerappa Moily could be in the dock for raising funds for his family controlled trust from a corporate giant when he was Corporate Affairs Minister. Moily faces another serious case of conflict of interest as a top official of Reliance Industries is advisor to a company controlled by Moily’s son Harsha Moily. Even earlier, the Minister has faced charges of favouring Reliance in the KG basin case.

Veerappa Moily has been president of Kissan Sabha Trust (KST), which received huge funds from ITC from Corporate Social Responsibility (CSR) budget in September 2012. His son Harsha Moily’s email message to his partner Sudhir P clearly showed that Moily himself managed the fund from the ITC for his private trust.

“Sudhir — Dad just called and confirmed that ITC has approved the funding the operating expenses of KST (Kissan Sabha Trust) for the next five years. Therefore, for ITC to process the payments, we have to immediately furnish ITC all OpEx bills for Karkala & Chikaballarpur for the academic year 2011-12. Request you to do the needful,” said the email message, which was also forwarded to Moily’s official email vmoily@ kar.nic.in.

The subject of the message was Capital Budget for Kissan Sabha Trust for Funding. The Kissan Sabha Trust is a family-controlled trust of Moily. It was established decades ago and is running educational institutes and charitable organisations in Karkala and Chikaballarpur in Karnataka. In addition to Moily, his wife Malathy, son Harsha and daughter Sushma too are members of the trust.

“The total capital cost for Karkala school comes to Rs.1.71 crore and for Chikkaballarpur school Rs.3.10 crore. Total capital cost comes to Rs.4.81 crore…. For operating the schools, our budget right now is Rs.50 lakh for this year and will increase with PUC students getting admitted. Hence we may ask for a corpus fund of Rs.6 crore to fund the day to day operations @ 8% per annum,” said an earlier email sent by Sudhir to Harsha Moily. The email messages between the duo talk about approaching the corporate sector for the requirements of the trust.

The person, Sudhir P, referred in this mail is Sudhir K Prabhu. He is also a Director in one of the companies run by Moily’s son  and the Karnataka branch head of a Mumbai-based Chartered Accountant’s firm, which audits companies of Harsha Moily.

The documents available with The Pioneer show that Harsha Moily is/was Promoter and Director of four companies, whose business flourished after Moily became Cabinet Minister in May 2009. The account of one of his companies shows an unsecured loan of Rs.6 crore from an unknown source. Moksha-Yug Access India Private Limited is one of the major companies run by Harsha.

The company which faced fund crunch after it was established way back in 2005, literally got “Moksha” after Veerappa Moily landed in Union Cabinet in 2009 as Law Minister, then moved to Corporate Affairs Minister with additional charge of Power, and finally shifted to the coveted Petroleum and Natural Gas portfolio.  

  

The Moksha-Yug Access (MYA), started as a supply chain company of rural products, is currently concentrating on milk supply. The company, which was floated by Harsha and his sister Hamsa, handles more than one lakh litre of milk supply every day.

And here comes the Reliance connection. The website of the company claims that one Mr Ananth Ravi, President of Reliance Industries, is their Advisor.

“Mr Ananth Ravi advises MYA on finance related matters. He has led the Project Finance team of Reliance in the financing of billion dollar projects in telecom, petroleum and retail sectors. He was also instrumental in setting up the Reliance’s telecom venture, Reliance Infocomm operations in Karnataka. He brings to MYA, his vast experience in project management and finance,” says the company’s website.

Around 50 per cent of this company’s shares are held by US and Mauritius-based funds, while Harsha owns around 20 per cent stakes. Well-known companies like Bharat Forge and Jubilant Agro are stakeholders or Directors Board of this company.

MYA Financial Services Private Limited, Rural Crystals Educational Services Private Limited and MVH Holdings are the other three companies where Harsha and Moily’s other family members are Directors.

.................................................. 

Moily's son speaks out : 

  

Pioneer News Service / New Delhi March 20, 2013

While Moily maintained a stony silence over the exposé, his son Harsha Moily issued a clarification through a PR agency. He sought to claim that their family-controlled Kissan Sabha Trust (KST) “operates on low budget and expenditures were met from donations from public”.

“As a practice budget requirements are drawn to understand the funding requirements to run educational institutions for underprivileged poor and school dropouts. The estimation for a yearly operating expenditure was worked out at Rs.50 lakhs a year. A corpus to ensure yearly interest receipt was worked out at Rs.6 crores to yield Rs.50 lakhs at 8 per cent interest per annum. The estimation of creating a corpus is an accounting exercise. The Trust has not received any funding of Rs.6 crores. It has been granted Rs.42 lakhs to fund the operating expenditure for the year though the operating expenditure is higher and is met from donations from the public. The trust operates on a low budget and does not have any corpus or other assets,” an emailed statement on behalf Harsha Moily maintained.

Harsha admitted that Ananth Ravi, president of Reliance Industries, was an “Advisor” in his company Moksha-Yug Access India Private Ltd (MYA). However, Harsha claimed that Ravi “excused from the Advisory Board” since August 2012 and that he was his “mentor” from 1999. 

“It is important to note that MYA received funding from professional investors in 2008, much before my father joined the Government. MYA’s investors did due diligence on MYA through the most part of 2007, and the funding from VCs came through in March 2008,” he said, while reacting to this newspaper’s report that funds started flowing from 2009 when Veerappa Moily became the Union Cabinet Minister.

The fact remains that the The Pioneer report focussed on highlighting Veerappa Moily’s role as Union Corporate Affairs Minister in managing funds from the corporates for his family-controlled Trust. The newspaper never mentioned about the amount of funds received by KST from tobacco major ITC. It cited only the contents of the emails between Harsha and his partner Sudhir P to established Veerappa Moily’s direct involvement in the whole issue. The report mentioned about a transaction of Rs 6 crore, as unsecured loan in two tranches from unexplained sources, to Harsha’s another company called MVH Holdings.

“Sudhir - Dad just called and confirmed that ITC has approved the funding the operating expenses of KST (Kissan Sabha Trust) for the next five years. Therefore, for ITC to process the payments, we have to immediately furnish ITC all OpEx (Operational Expenses) bills for Karkala & Chikaballarpur for the academic year 2011-12. Request you to needful,” said the email message sent by Harsha to his partner.

The email was also marked to Veerappa Moily’s official email id vmoily@kar.nic.in at 1.09pm on September 21, 2012. The subject of the message was ‘Capital Budget for Kissan Sabha Trust for Funding’. Harsha didn’t contradict the facts as reported by The Pioneer and chose to maintain silence both on his father’s role.

No favour to corporates in lieu of funds for trust: Moily

Pioneer News Service / New Delhi  March 21, 2013

Breaking his silence over The Pioneer expose on his role in managing funds from ITC to his family-controlled Kissan Sabha Trust (KST), Petroleum Minister Veerappa Moily on Wednesday admitted that his Trust approached corporates “for noble purposes”. In a Press release, Moily claimed that he never extended any favour or help to any corporates for seeking financial assistance for the trust.

However, in his two-page statement, Moily chose to keep mum on the email communications between his son and partner over the funds from tobacco giant ITC. “Dad just called and confirmed that ITC has approved the funding for next 5 years…,” his son Harsha stated in his email to his partner and marked to Veerappa Moily also.

“The Trust accounts are maintained in a fair and transparent manner and the same is open for any scrutiny. However, in order to effectively work towards achieving its noble purpose, the Trust approaches Corporates who are promoting the social cause for the benefit of the people from the bottom of the pyramid.

“I would like to categorically state that there have been absolutely no occasion for me to extend any kind of favour or help to any corporates for seeking financial assistance for the Trust,” said Moily in the statement.

Moily said that he was “pained” to see that his son Harsha’s successful business ventures being condemned, merely since he “happens to be son of a political person”.

“It is also a matter of fact that Harsha has been successfully working towards social cause on the basis of his own conscience and without any political ambitions,” said Moily senior.

Italian media hints at Cong link to copter scam

J Gopikrishnan / New Delhi

 Feb 15, 2013

Like the Bofors scam, the AgustaWestland chopper deal too has telltale signs of a Congress connection. According to the Italian newspaper ‘Lettera 43’, main commission agent Christian Michel’s late father was “close to the Congress party”, and the other middleman, Guido Ralph Haschke, was a Director of Emaar-MGF, a real estate company owned by relatives of Kanishka Singh, who is associated with a Congress high-up.

Michel was also the agent of Dassault, which has emerged as the lowest bidder for the Indian Air Force’s 10 billion dollar deal for Rafale fighter jets, supposed to be the world’s biggest tender. 

According to the Italian newspaper report on November 20, 2012, the “mysterious” British citizen Michel, described as “Man of Orsi”, had received 60 per cent (around `210 crore) of the kickback amount of 51 million Euros (around `360 crore) from the Finmeccanica, the manufactures of AgustaWestland choppers.

The investigation report filed in the Italian court corroborated the findings. It said that the CEO of Finmeccanica, Giuseppe Orsi, and AgustaWestland CEO Bruno Spagnolini had paid 30 million Euros (`217 crore) to Christian Michel. “Orsi and Spagnolin, moreover, paid Christian Michel a total amount of about Euros 30 million, partly destined to support the corrupt activity meant to bag the order and partly to implement the contract,” the document said.

“Born in 1961, Michel is little known to the public. On the internet, there are no evidences of his business or his statement. Not a photo or an interview. Yet, Michel is very well introduced in Defence establishments in New Delhi,” says the Italian newspaper report titled “Christian Michel, the English middleman of Finmeccanica.”

“His contacts are stronger especially with the Indian Defence, that he has inherited from his father, Wolfgang Max Michel Richard, a British businessman who was very active in India between 80s and 90s and was close to the Congress party,” the reports says. 

The detailed article on the business background of the “mysterious” Michel stated that his father had business interests in Libya, Russia, Iran and Iraq. He was a Labour party’s fund-raiser before his death in August 2012.

Italian newspaper reports as well as French Court records establish that Michel was an agent of Dassault, which is set to bag the 10 billion dollar worth deal from Indian Air Force. According to these reports, in 2004, Michel sued Dassault over non-payment of commission for the purchase of Mirage aircraft for Indian Air Force in 2000. However, Michel lost the case at Paris Commercial Tribunal on the technical grounds that his agreement with Dassault had expired.

Haschke case is all more bizarre. The man who confessed to the Italian court on his connections with former Air Chief SP Tyagi was the Director of Emaar MGF, the firm which bagged the biggest deal in connection with Commonwealth Games. Haschke is neither builder nor a real estate entrepreneur, so his connection with Emaar  MGF is bound to raise eyebrows.

The controversial real estate giant is still being probed by the CBI for alleged irregularities in the construction of the Games Village Complex in Delhi. Late Ved Prakash Gupta, the founder of Emaar MGF, was the maternal grandfather of Kanishka Singh. Kanishka’s father late SK Singh was also promoter of another related company called MGF. The real estate company Emaar MGF was doled out controversial favour by the Delhi Development Authority after it bagged the contract for building the CWG Village.

According to the prospectus filed by Emaar MGF with SEBI, Haschke was Director in September 2009. But in December 2009, he resigned after the Games scandal exploded and Opposition leaders and former BJP chief Nitin Gadkari alleged that the Emmar MGF had been favoured due to its link with Kanishka Singh.

1951 born, Haschke is a Switzerland-based defence middleman, who holds dual passports of his motherland Italy and that of the USA. Haschke earned 20 million euros (around Rs 150cr) in the deal, according to chargsheet in the AgustaWestland case. It is learned that Haschke stopped visiting India after 2011, when his name cropped up in the Italian probe. Michel, a frequenter to Delhi for the past two decades, also stopped coming to India after August 2012. He is currently operating from Dubai.

[The report was published in ‘The Pioneer’ on Feb 15, 2013]

Feb 16, 2013 – The Pioneer

About “the family” in the Copter Scam

A mysterious family has emerged as the major recipient of the payoff in the Rs 3,700 cr AgustaWestland helicopter deal. In the 64-page chargesheet filed in the Italian court, pages 40 and 41 refer to “the family” which got 28 million Euro (around Rs 200 cr) as kickback from the Finmeccanica, the Italian manufacturer of the AgustaWestland (AW) helicopters.

“We have had extensive discussion on Sunday, the 8th of May, 2011, and it has come to light that there were two agreements in place with AW which is where the misunderstanding has arisen. One agreement was for EUR 42mn with the team and other for EUR 28mn (not less than 5% of the total contract value) with the family.

“The team has agreed to reduce their EUR 42mn to EUR 30mn while recognising the need for the agreement of EUR 29mn with the family to be honoured in full,” said the document, which is the part of the chargesheet.

According to the chargesheet, this document was seized from the bedroom of middleman Haschke’s mother during a raid in Switzerland in April 2012. The chargesheet also talks about a dispute between another middleman Christian Michel and Haschke on sharing the commission amount. Michel was forced to accept around 12 million Euro (around 85 crore) to accommodate “the family.”

The chargesheet has details about the separate payments made to each member of another family — the Tyagis - amounting to 4,00,000 Euros (around Rs  3.5 crore).

According to the Italian investigators, the next tranche of evidences and the second chargesheet is expected to be filed by March-end.

The BJP on Friday stepped up pressure on the UPA regime asking it to reveal the identity of “the family” that received Rs 200 crore kickbacks.

“Who finalised and signed the VVIP chopper deal?, asked BJP spokesman Prakash Javadekar. He also demanded the Government to answer. “Who received the kickbacks?”

He said the Italian chargesheet talks about payment of 28 million Euros to ‘The Family’ at least at two points. “The nation wants to know who “The Family’ is?” Javadekar told reporters.

In its Friday edition, The Pioneer quoted French and Italian newspaper reports claiming that the main commission agent Christian Michel’s late father was “close to the Congress party”, and the other middleman Guido Ralph Haschke was a director of Emaar MGF, a real estate company owned by relatives of Kanishka Singh, who is associated with a Congress high-up.

Meanwhile, BJP national secretary Kirit Somaiya on Friday wrote to the CBI seeking an investigation into the role of Kanishka Singh in the helicopter deal. In his petition to CBI, pointing out that one of the Italian middle man Guido Haschke was a Director with the real estate company, Somalia said that Emaar MGF owned by Kanishka’s relatives benefited from the chopper deal.

Emaar MGF washes hands of Kanishka, Haschke

Real estate major Emaar MGF on Friday claimed it has “no links with Kanishka Singh or any of his relatives”. The company also said that it was in no way connected with the business of the Italian middleman Guido Haschke and that he served only for a short period in its Board of Directors.

Reacting to a story published in The Pioneer’s Friday edition titled ‘Italian media hints at Congress links to copter scam’, the company said: “We have no links with Kanishka Singh or any of his relatives as mentioned in your story. We would like to state that Kanishka Singh or any of his relatives have no direct or indirect business interest, including as a shareholder and/or promoter in Emaar MGF. We are a corporate house with best of corporate governance and all our shareholding is public and has been filed with various authorities as and when required as per the statutory requirements.”

The company admitted Haschke  served as an independent non-executive director for a brief period. “Emaar MGF has had no other association with him or any of his businesses/associates other than this. Haschke was appointed on the Board of the Company due to the statutory requirement of having a diversified board with a certain number of independent directors on the board to be a publicly listed company. Therefore he was appointed as an independent director to fulfill the requirements of the company’s proposed IPO.” The company also claimed he had not visited any of their office or even attended any board meetings.

The company said Haschke was a registered consultant to the World Bank for Asset Trading and Debt Restructuring and was appointed by it considering his experience with international financial.

The Pioneer stands by its report. It is known that Kanishka Singh’s maternal grandfather Ved Prakash Gupta was the founder of Emaar MGF. The company’s current promoter Rajiv Gupta is Kanishka’s uncle. Other promoters, Shravan Gupta and Siddharth Gupta, are his cousins. We have only reported the facts in public domain.

The good CAG and the bad CAG

J Gopikrishnan
[The Pioneer Op Ed article Dec 12, 2012]

On December 3, Comptroller and Auditor-General Vinod Rai and his colleagues must have had a hearty laugh watching television channels flashing news of Union Minister for Information and Broadcasting Manish Tewari’s live Press conference at the All India Congress Committee’s office. Mr Tewari, a frequent CAG baiter, was ‘revealing’ to the media a ‘scam’ related to Gujarat Chief Minister Narendra Modi. The Minister was talking at length and posing serious questions to Mr Modi on the benefits allegedly given to certain companies, and the role of a foreigner in the gas exploration contract of a State public sector undertaking. He was citing a magazine report which in turn was based on the CAG’s findings.

Several illegalities in the gas exploration contract had been then found by the CAG, and these were tabled in its report in the Gujarat Assembly on April 2012. Though the magazine gave credit to the CAG in its recent report, Mr Tewari refrained from doing so. He instead praised the magazine for the exposé on Mr Modi’s “corruption”. In fact, even the questions that Mr Tewari asked the Gujarat Chief Minister in the Press conference were a direct lift from the CAG report.

Ironically, Mr Tewari banked on the CAG’s findings against the Modi Government’s gas exploration contract. Till this Press conference, the Congress and its Ministers since the past two years had been mercilessly attacking CAG and its chief, Mr Rai, for the findings in the 2G Spectrum scam report.

For these politicians, the CAG report is gospel truth when it suits their politics and when it does not, they violate all norms of decorum to attack the CAG in general and its head in particular.

This ‘my CAG versus your CAG’ syndrome is the bane of Indian politics. When the CAG report is against them, politicians immediately start raising questions: Can the CAG question policy? Next will be the turn of the spin doctors of the party. The so-called brigade will initiate Goebbelsian methods by questioning the auditing style and ‘unilateral’ move of the CAG, and its method of calculation of presumptive loss. The last, of course, is the contribution of the dirty tricks department.

We recently witnessed the dirty trick played by the UPA regime when it dug up a retired auditor to trash the very report which he had prepared. Given the downgrading of Indian politics and the magnitude of slush money involved in the scams unearthed by the CAG, we may see more retired Government personnel coming out in the future. The theatrics of retired auditor RP Singh are hidden from no one. He was present at the Press conference when the CAG report on 2G Spectrum scam was unveiled two years ago, proudly explaining the nitty-gritty of the report on the massive scam. He is the same person who presented the report before the parliamentarians of the Public Accounts Committee, after taking oath. His numerous U-turns now have thoroughly undermined his credibility.

The CAG’s critics ignore the powers, the duties and the responsibilities of this premier constitutional body of the country. CAG auditors do not arrive at their conclusions unilaterally. There are several pre-audit and post-audit conferences and interactions between Ministries and Government Departments concerned and the CAG team. Several questions need to be addressed and answered satisfactorily before preparing the draft report itself. The CAG’s office scrupulously seeks explanations more than once from the persons concerned, before indicting them. This prestigious body needs nobody’s consent in deciding on what should be audited. It is simply its prerogative to decide on what to audit, when to audit and how to audit. Those powers are derived from the Constitution. It is, therefore, highly amusing to read newspaper headlines of this kind: “Reliance agrees for auditing”.

The 2G scam report is unique. It is the very first report where the CAG found the role of corporates or bribe-givers in influencing policy-makers while dealing with the Government and in the allotment of natural resources. The CAG’s subsequent reports on Coalgate, Delhi Airport and mega power projects indicted and exposed the ‘who’s who’ of India’s corporate sector.

Apart from the politicians and the Government, the CAG has thus added corporates to its list of opponents. With the involvement of the corporate sector in many shady deals, CAG-bashing has gained added impetus of late.

In normal practice, a CAG report broadly has three parts. First, the report will speak about the policy and norms in practice and the history of that policy. Second, the report will expose the violations and the illegalities and, if needed, indict the persons concerned. Finally, in its suggestions/observations, the CAG may highlight the possible loss or presumptive loss to the public exchequer due to the illegalities. The presumptive loss is derived through certain statistical measures and it is the CAG’s prerogative to do so.

For more than five years, Parliament has not debated any CAG report. Normally, the CAG report tabled in Parliament goes to the Public Accounts Committee for a review. Some non-important CAG reports may not go to the PAC and it is the PAC’s prerogative to take a decision on this. The CAG report then returns to Parliament with the PAC’s recommendations for a debate. But the Congress has used its majority to scuttle the PAC report on the 2G Spectrum scam with the help of the Samajwadi Party and the Bahujan Samaj Party. This is because the PAC has questioned the role of Union Finance Minister P Chidambaram and Prime Minister Manmohan Singh himself in the scam, while the CAG had limited its indictment to only former Union Minister for Telecommunications A Raja. Using political leverage to influence probes and swing deals portents ill for democracy and this country.

The CAG is considered a friend, philosopher and guide of the PAC. The CAG and its officials concerned with the report are part and parcel of PAC meetings. Despite knowledge of these conventions and practices, a brouhaha on the relations between the two bodies is created frequently.

It is the Government’s moral duty to hold an immediate debate on the important CAG reports, as soon as these reports are tabled. It is also the Opposition’s moral obligation to demand a debate. But today, because of the involvement of influential people in and outside the Government, none of the people’s representatives in Parliament wants debates. Instead of a structured debate on the CAG report in Parliament and the State Assemblies, political parties prefer mudslinging. Structured debates will force the Government at the Centre to respond and be accountable. Also, the bribe-givers from the corporate sector will be exposed.

Incidentally, what were the Congress MLAs in Gujarat doing when the CAG placed the report in April 2012, on the irregularities in gas exploration project? What was the PAC in Gujarat headed by a Congress MLA doing on this CAG report all these months?

‘Fearless’ CBI officer Pulsania no more

Pioneer News Service / New Delhi

Nov 9, 2012

The Supreme Court on Thursday mourned the death of CBI DIG Suresh Kumar Palsania, the ace investigator in the 2G spectrum scam. Palsania, 44, was laid to rest at his native village at Jaswantpura in Jaipur this afternoon.

The bench of Justices GS Singhvi and KS Radhakrishnan reminisced the young, dynamic and fearless officer’s contribution, responsible for netting big fishes like former Telecom Minister A Raja and DMK MP Kanimozhi. “Just yesterday we mentioned his name. It is so sad he was only 44. What else we can do than to console ourselves to what God demands?” said the bench.

A 1996-batch Odisha cadre IPS officer, Palsania battled leukemia till he breathed his last at a private hospital in South Delhi , 20 days after the disease was detected. He is survived by his wife and a 11-year-old son. “We are all shocked and devastated by his sudden demise. He was one of the most outstanding officers of CBI. His ability, competence and complete understanding of the subject were absolutely brilliant. His is a great loss not only to CBI but the whole IPS community,” said CBI Director AP Singh.

Recipient of this year’s Police Medal for meritorious service, Palsania served in Policy Division and Anti-Corruption Branch where he handled major corruption cases like 2G and CWG scam. Palsania had walked out of a meeting with a senior government law officer who wanted to discuss the strategy on 2G case with him along with Raja’s lawyer.

Land grabbing of Chidambarams

[The series published in "The Pioneer" from Sept 7, 10 & 11 - 2012 on land grabbing by Union Finance Minister P Chidambaram's family and his blatant lies exposing discrepancies in several mandatory affidavits to Election Commission in 2004 & 2009 and to PM]

Sept 7, 2012

Chidambaram hid wife's land record

J Gopikrishnan

New Delhi

The statement of annual Assets and Liabilities filed by Finance MinisterP Chidambaram to Prime Minister Manmohan Singh does not give details of the controversial land off Chennai seashore held by his wife Nalini Chidambaram.

In his statement of Assets and Liabilities as of March 31, 2012, which was uploaded on Tuesday on the PMO website, Chidambaram has not mentioned the quantum of land his wife Nalini owns in Chennai’s prime location off the seashore along the East Coast Road .

The Chennai Police is probing allegations of land grabbing by Nalini and son Karti after several fishermen recently filed a complaint to CM J Jayalalithaa.

Till last year in his annual Assets and Liabilities statement, Chidambaram declared that the land held by his wife was agricultural land, but he did not disclose the details of the area under possession. The statement filed by Chidambaram to PMO, last year, says this land in Muttukad Village in East Coast Road is valued just Rs27 lakh.

The land records of Nalini’s holdings are suspect. According to the records with the Muttukad Village registry, Nalini holds five acres from 1991, but curiously the records do not say how she got the land; the columns to notify the previous owner or seller are blank.

In the thick of controversy over land grabbing charges faced by his wife and son, Chidambaram has changed the status of this controversial land in the latest statement to the PMO. This time he has not claimed this was agricultural land. While there is no mention of the quantum of land in his statement, he has devalued the price of land to Rs25 lakh. The market value of the land in this locality is currently Rs10 crore per acre.

Moreover, in March 2009 during DMK regime, M/s Kaiser Surya Samudra Resorts Pvt Ltd, a company controlled by Karti, got environment clearance for constructing a luxury hotel with 100 rooms on 12 acres, adjacent to Nalini’s properties. But the RoC document of the company is silent about these land holdings. Fishermen complain that this 12 acre land was also grabbed and probe by Chennai Police is still pending.

Sept 7, 2012

PC family sinks in land bog

Kumar Chellappan

Chennai

Hundreds of fishermen who have levelled serious land grab charges against Union Finance Minister P Chidambaram’s family, have accused them of illegally capturing major portions of Uppankali, a saltwater lake measuring 98 acres, and a three-kilometre stretch of seafront along the Bay of Bengal coastline near Chennai.

“This is in addition to the 12-acre land annexed by them after the 2004 tsunami devastation,” PS Sanjeevi, 55, a fisherman of Karikattukuppam village, said.

Jaya Palayan, president, South Indian Federation of Fishermen Societies (SIFFS), told The Pioneer that according to the land documents under his possession, the Chidambarams have grabbed land coming under survey numbers 113 and 114. “The three-kilometre long and 200-metre wide stretch of land between the lake and ocean has been grabbed by them,”said Palayan.

Fishing, the only livelihood of the entire village with a population of 1,500, has been upset because of the attempts by the Chidambarams to grab the lake and the Government land, they claimed.

“Chidambaram’s family has built a compound wall fortifying the grabbed land, the lake and the entire beach,” said GV Murugan, 41, another fisherman from the village. Both Murugan and Sanjeevi said that because of the compound wall, the entire fishing community has lost access to the sea.

“We are forced to take a detour of three kilometres to reach the beach from where we set out for fishing. We have to keep our boats, nets, heavy machinery and catamarans on a small stretch of land, far away from our dwelling places. The Chidambarams are pressurising us to remove the equipment from that land. They claim the ownership of that stretch of land too. The Chidambarams are planning to build a seaside resort with boating facilities,” said Vinayakam, another fisherman.

The group of fishermen led this reporter to the stretch of land allegedly grabbed by Nalini (wife of P Chidambaram) and Karti P Chidambaram (their only son). Murugan, who speaks English and keeps track of all land dealings in the village, said, “Nalini Chidambaram had reportedly purchased five acres of land in Karikattukuppam Village in 1991. After the 2004 tsunami, all of us were relocated to a distance of three kilometres from the shoreline. We were told to stay a safe distance away from the shore to safeguard against future tsunami attacks.”

“But one morning we found that the land where we were staying till tsunami struck has been occupied by the family of Chidambaram. They also annexed a portion of the lake, which was our only source of livelihood during lean season. Now, we have been asked to keep off the lake because they are going to build a resort. Efforts are on to fill the lake with sand and mud,” claimed Murugan.

“The Chidambaram family could be the only private individuals in the country owning a lake,” the fishermen added.

Mangalam, a fisherwoman, said a part of the lake has been filled with mud and sand. She said tsunami affected them for a day only, but the land grab has destroyed their lives forever.

Though the Finance Minister’s family constructed a three-kilometre long wall fortifying the lake and the seashore, the fishermen demolished a part of the wall. “We have got a stay order from the Madras High Court restraining the Chidambarams from building the wall,” said Sanjeevi.

The fishermen said the lake was three kilometres in length and 200 metres wide. “The entire land grabbed by the Chidambarams is a barren stretch where nothing grows other than Palmyra trees. Nothing could be cultivated there,” said Sanjeevi, who also charged that the Finance Minister in an affidavit to the Prime Minister had described the land as agriculture land.

All the fishermen in the village were born in Karikattukuppam itself. We know each other well and hence, land grabbing of any kind will be immediately detected by us, they said. “Last week, we had a meeting with Nalini Chidambaram at their Chennai residence. She asked us to vacate the land at the earliest and look for other jobs,” Murugan alleged.

Blatant violation of Coastal Regulation Act could be seen at the beach side of the lake where new houses have been built by those with the right kind of political patronage. “As per rules, nobody can build houses in the 100-metre stretch of land on either side of the lake. But the powers that be have turned a blind eye towards this violation,” added Sanjeevi.

Casual enquiries with local real estate dealers revealed that an acre of land in the Karikattukuppam Village costs Rs10 crore and above.

Sept 7, 2012

No land grabbing, says family counsel

Pioneer News Service

Chennai

R R Arun Natarajan, counsel for the family of P Chidambaram, denied all charges of land grabbing levelled against the latter’s family by a section of the fisherfolk. "The land at Karikkattukuppam near Muttukadu was purchased by Nalini Chidambaram and Karti P Chidambaram  in 1992. They have  the title deeds, pattas and all other documents which confirm the fact that they are the legal owners of the land. They are using the land uninterruptedly since then,” Natarajan told The Pioneer.

He said the charges are baseless and would not stand scrutiny in a court of law. Arun Natarajan was contacted by this newspaper as per the directive of Karti Chidambaram.

He said the fishermen were using the plot of land owned by the Chidambarams for open defecation since the houses provided to them by the State Government post-tsunami did not have toilets or drainage facilities. “My clients were forced to build the compound wall to keep the plot of land neat and clean. They have not trespassed into any Government or poramboke land,” said Natarajan.

According to Natarajan, the local Government did not take any action when his clients complained about trespassing by the fishermen for open defecation in the land. “It is true that they destroyed a portion of the compound wall built by my clients. We have filed a writ petition in the Madras HC and a complaint in the nearby Kanathur police station against these people. Let us see what is in store,” said Natarajan. But the question how a three kilometre long compound wall was constructed between the lake and the sea remains unanswered.

SHADY DEALS

# Now facing charges of land grab, Nalini Chidambaram had appeared for Murugan, a local fisherman in 2005 asking the Madras High Court to restrain a group of real estate brokers from constructing the same compound wall “She appeared for me in the Public Interest Litigation and argued that the compound wall was being built on the promboke land (free/public land owned by state). Then she made a volte-face and joined hands with the real estate cartel operating here,” said Murugan

# Pointing this out, Jaya Palayan, President, South Indian Fishermen Societies, said that the Court ruled in their favour. But within weeks, Nalini joined the same people who were behind the construction of the wall, said Palayan.

Sept 10, 2012       

PC scales down land's worth

J Gopikrishnan / Kumar Chellappan

New Delhi / Chennai

Union Finance Minister P Chidambaram doesn’t seem above board in the controversy over the alleged capturing of land by his family on Chennai’s East Coast Road . In the mandatory affidavits on assets and liabilities to the Prime Minister and the Election Commission of India, Chidambaram has declared sharply contrasting details of the land “owned” by his wife Nalini.

In his affidavit to the Election Commission in the 2009 Lok Sabha polls, when he contested the Sivaganga seat, Chidambaram declared that his wife has a total of 3.72 acres in Muttukad and Kannathur villages. The total value of the two properties was quoted as 3.49 crore by Chidambaram. He said Nalini has 2.88 acres of land worth 2.44 crore in survey number 98/7 in Muttukad village, and 0.84 acres, valued at 1.05 crore, in survey number 103/1&2 in the same sea shore stretch in adjacent Kannathur village. Chidambaram stated both the properties as agricultural land. 

However, in affidavit of statement on assets and liabilities to Prime M i n i s t e r M a n m o h a n S i n g h , Chidambaram declared the value of the two prime properties to be just 27 lakh — which means a whopping 3.22 crore depreciation in two years. He continued to claim the agricultural land status, but to the PM he did not bother to provide any specifics of his wife’s controversial properties including survey numbers and land area. 

As if the two starkly contrasting details weren’t enough, in the current assets and liabilities statement (as on March 31, 2012) to the Prime Minister, which was uploaded a few days back on the PMO website, Chidambaram went a step further undervaluing his wife’s property by 2 lakh. The property’s value, which he had quoted as 27 lakh in 2009, has now been shown to be worth 25 lakh. 

Interestingly, this time around he didn’t claim agricultural status of the two properties but continued not to provide the area and survey numbers of the land in Nalini’s possession. As things stand, the current market price of land on the East Coast Road is around 10 crore per acre. According to the land registry records of Muttukad Panchayat, the details of which are with The Pioneer, around 10 acres of land is with Nalini under different sub-clauses of survey number 98. Going by the market value, the around 10-acre property owned by Nalini is worth 100 crore. Even if one were to go strictly by the land details stated by Chidambaram in his affidavits, Nalini's 3.72-acre property is worth over 30 crore as per the current market rate and not 3.49 crore. Also, neither 27 lakh nor 25 lakh! 

Apart from the discrepancies in the area of land that the Chidambarams own and the massive undervaluation, mysteriously, the mandatory columns for providing the details of previous landowners have been left blank. Chidambaram’s family claims these prime properties have been in their possession since 1991. 

But local fishermen allege this is a classic land grab case by the high and the mighty. According to the fishermen, the Chidambarams also hold an adjacent lake and are planning to construct a luxury hotel in the locality. 

In 2009, during the DMK regime, a company called Kaiser Surya Samudra — controlled by Chidambaram’s son Karti’s company Ausbridge Holdings — got environmental clearance for constructing a 100-room luxury hotel in the same locality. 

Though RoC documents of the company are silent about the land details, the State Government’s clearance certificate says the project is coming up on 12 acres in the same controversial locality. 

Both Nalini and Karti are now facing allegations of land grabbing in the sea shore areas of Muttukad and Kannathur village in Chennai’s plush East Coast Road . The State Government has ordered a probe after hundreds of fishermen of the area alleged that the Chidambarams have captured a three-kilometre long seafront. 

Sept 11, 2012

PC lands in more land trouble

J Gopikrishnan / Kumar Chellappan

New Delhi / Chennai

More skeletons have tumbled out of Finance Minister P Chidambaram’s closet. This time it is about the stark discrepancies in the land holding declared in the name of his wife in the affidavits filed before the Election Commission of India in 2004 and 2009.

In 2004 election affidavit, PC declared his wife Nalini held only 1.2 acres on Chennai’s seafront. But in the 2009 election affidavit under the same survey numbers, he declared a holding of 3.72 acres. At the same time, the latest land records in the panchayat register mention Nalini has around 10 acres in the locality since 1991.

Not only both affidavits differ with each other they also differ with his statements on assets and liabilities filed to the Prime Minister in 2011 and 2012 as well as land records register of the concerned panchayat.

In his affidavit filed before Election Commission for the  2004 Lok Sabha election, Chidambaram  declared his wife Nalini had a total of 1.2 acres under different survey numbers of the locality and declared Rs 95 lakh as the value of the properties.

In his affidavit, Chidambaram said, Nalini has 0.2 acres land property worth Rs 60 lakh under survey number 103/1&2 in Kanathur Village . He said that his wife also has 1 acre land worth Rs 35 lakh under survey number 98/7 in the adjoining Muttukadu Village.

But in the 2009 elections, Chidambaram declared his wife has a total of 3.72 acres under the same survey numbers. In his affidavit for the 2009 controversial Sivaganga Lok Sabha polls, Chidambaram said Nalini owned 0.84 acres in Kanathur Village under survey numbers 103/1&2 (same survey numbers mentioned in the 2004 affidavit) and valued the property for Rs 1.05 crore.

He said his wife also has 2.88 acres worth Rs 2.44 crore under survey number 98/7 (same survey number in 2004) in Muttukadu Village . The gross value of both lands was shown as Rs 3.49 crores. In his election affidavits and in his 2011 affidavit to PM on his assets and liabilities, Chidambaram showed as agriculture land which Nalini held near the seashore.

But in 2012, in his statement to the Prime Minister, he did not claim agriculture status to the same land. Chidambaram’s contrasting declarations on his wife’s properties to the Election Commission in 2004 and 2009 does not tally with the land records register of Muttukadu Panchayat.

The land register details available with The Pioneer shows that in the seafront area from 1991 onwards, Nalini had several tracts of land totalling around 10 acres. The land records have no mention of previous owners in most of the transactions.

The question arises as to  why Chidambaram did not mention in his election affidavits the details of the 10 acres held by his wife from 1991 onward as shown by the land records.

The Pioneer had already reported that in his statement to PM in 2011, Chidambaram undervalued the price of Nalini’s holdings in the seafront area to just Rs 27 lakh, without giving any specifics of the land including area wise details. 

In his latest filing to Prime Minister (as on March 31, 2012), while  he did not claim agricultural status to the land, he  further devalued it to Rs 25 lakh. It is a known that the current market price of the land is around Rs 10 crore per acre in Chennai’s East Coast Road . Like his earlier declaration to PM, the Finance Minister also did not give specifics of the land “owned” by his wife, who is facing allegations of land grabbing by fishermen community.

The fisher folk of the locality allege Chidambaram’s family members had encroached three kilometre stretch of the seafront area including a salt lake in the East Coast Road for constructing a luxury hotel. The State Government ordered a probe in this regard against Chidambaram’s wife Nalini and son Karti after fishermen recently lodged a complaint to Tamil Nadu Chief Minister J Jayalalithaa.

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.