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Prasad, Tewari under a cloud over retainer service to Reliance

December 19, 2014 11:58 IST

While Manish Tewari said he had surrendered his bar licence the day he was made a Union minister in 2012 and had written to RIL terminating the relationship, Ravi Shankar Prasad said he had terminated all his professional relationship with the Reliance group two months before he became a minister.

The Aam Aadmi Party has demanded the dismissal of Telecom Minister Ravi Shankar Prasad alleging a conflict of interest that has prevented him from issuing a notice to Mukesh Ambani's Reliance Jio on the 4G issue, a charge vehemently denied by Prasad who said he never gave advice or appeared for the company.

AAP leader and advocate Prashant Bhushan also alleged that Manish Tewari, who was a Union minister in the previous United Progressive Alliance government, had a retainership contract with Reliance Industries.

Tewari said he had surrendered his bar licence the day he was made a Union minister in 2012 and had written to RIL terminating the relationship.

"Ravi Shankar Prasad is in receipt of retainership from FineTech Corporation Pvt Ltd, a Reliance group company, from April 2013 to March 2014. Prasad, who is currently the minister of telecommunications, is sitting over a notice that needs to be issued to Reliance Jio with respect to the 4G case.

"Why is he sitting over this notice for the past three months and not allowing the department of telecom's access service division to issue notice to Reliance?" Bhushan charged on Thursday.

Prasad, he alleged, had received Rs 84 lakh as retainer fee.

The minister termed the allegations as "completely false and misleading," and said he had terminated all his professional relationship with Finetech in March, two months before he became a minister.

"I am shocked and I condemn the sensational allegations made by Bhushan and AAP," he told PTI.

"I have never given any advice or appeared for RIL," he said. "FineTech is a different corporate entity to whom legal services were rendered. Giving legal advice or retainership to companies is quite common with lawyers, particularly with eminent lawyers.

"As regards the allegation about Reliance 4G issue (is concerned), every decision will be taken purely objectively on merits and in light of the final report of CAG," he added.

Bhushan said CAG had in its report stated that Infotel Broadband Services, which was acquired by RIL, was shown undue favours in award of pan-India broadband spectrum resulting in loss of more than Rs 20,000 crore to the exchequer.

DoT, he claimed, was to issue notice to Infotel, which was subsequently renamed Reliance Jio, but the minister was sitting over it.

Addressing a press conference, AAP leaders Bhushan and Yogendra Yadav released what they said were receipt of payments made to Prasad and Tewari and demanded sacking of the telecom minister saying it was a clear case of conflict of interest.

Prasad said he had made full disclosure of his professional engagements to Parliament and had "maintained very high standards and was never associated with any interest of his client or articulated their concerns in Parliament."

Tewari said so far as the allegations pertaining to the JPC was concerned, he had declared his "professional relationships" and had even offered to recuse himself from the proceedings.

"I wrote to then chairperson of the Joint Parliamentary Committee P C Chako on March 21, 2011, submitting that I had represented telecom companies including Reliance Infocomm during the period covered by JPC investigation," he said.

AAP leaders said that before becoming a Union minister, Prasad was a member of the Joint Parliamentary Committee which examined matters relating to allocation and pricing of telecom licences spectrum.

The advocate turned activist said Tewari too had a similar agreement -- from October 2012 to May 2014 -- with RIL even during his tenure as the Union minister for information and broadcasting.

"Isn't it a conflict of interest? Reliance has a controlling stake in several channels, which come directly under the I&B ministry," Bhushan said.

Batting for a strong law on conflict of interest, Yadav said such former minister and MPs have been in various committees in which are of interest to companies.

"They should not be doing any legal work while holding high offices. Also, they must recuse themselves from a public office which deals with the business interest of companies," Yadav said.

AAP also released a letter purportedly written by Tewari in January 2012 seeking renewal of his retainership with RIL for a further period of three years, which the Congress leader rebutted saying he had terminated the contract no sooner he became a minister later that year.

Our Correspondent adds: Reporting on the matter, Financial Times, London said: ‘Accepting paid retainers from companies is not forbidden by India’s parliamentary rules, and commercial arrangements do not always have to be disclosed. There is no suggestion that any party broke Indian laws.’

According to the pre-eminent business newspaper, while Prasad sent Reliance invoices for over $ 100,000 (around Rs 6.3 million at today's exchange rate), Tewari sent similar invoices over the years.

The FT, quoting documents seen by it, said Prasad had ‘sent an invoice for $ 135,506 (Rs 8.4m) for legal services provided between April 2013 and March 2014 to Fine Tech Corporate Private, a Reliance affiliate’, Tewari was granted a monthly retainership in June 2010 by Reliance, ‘paying him a total of $ 193,580 ( Rs12m) over the next two years’. And, the newspaper said, ‘in June 2012, Mr Tewari wrote to Reliance asking for his contract to be renewed. Reliance agreed to pay a total of Rs 14.4m ($ 232,295) for two further years’.

FT also reproduced Reliance’s statement on the issue: ‘RIL has large and varied demands for legal assistance. We work with various lawyers from time to time for such legal assistance. The details of such engagement are contained in our accounts and are available with tax authorities.

‘Several eminent lawyers in India are and have historically been in active politics and have been rendering legal services to leading corporates in India. There is no bar against an elected representative to continue his or her practice while being an MP or MLA.

‘Our selection of lawyers is basis [sic] our needs and their expertise and that has nothing to do with their being in politics or being MP/MLA. As is the common practice and legal requirement, when such an MP/MLA has joined as a minister in the Union Cabinet, the engagement discontinues. Communication with lawyers are privileged and are protected by the law.’

Images: Ravi Shankar Prasad and Manish Tewari.

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