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'Sibal's arguments on 2G scam are deceptive'

July 25, 2011 23:03 IST

On day when A Raja, jailed former minister of telecommunications, accused Prime Minister Manmohan Singh and former finance minister P Chidambaram in a lower court while trying to drag them 'legally' in the 2G spectrum scam, Telecom Minister Kapil Sibal also picked up none else but Raja's lawyer's argument.

The current time is the most crucial for accused Raja because after hearing his arguments, the court will decide for or against framing of charges against him. And if the court finds enough prima-facie evidence then Raja will face the music for a decade or so before the final verdict comes out.

The argument by A Raja is considered self-serving because he is prospective accused but it also brings in the issue of collective responsibility of the Cabinet.

However, the government was defensive because their policy to 'save Congress' from the 2G scam taint was threatened inside the court room on Monday.

In last 18 months law ministry's brief to law officers has been quite clear: save PMO and Congress in the legal battle. But, Raja has dragged none other than the PM; so the government has partially picked up and defended Raja's argument that 'there was no corruption in the 2G spectrum allocation.'

A Raja's lawyer said, "When sale of equity does not amount to sale of license, there is no question of earning profit. How can (then) there be corruption in this regard?"

What A Raja wants to say is that since there is no 'selling' of spectrum (which can be legally proved), so there is no question of corruption on the account of its selling.

In a quite shocking manner, Kapil Sibal told three news channels the same thing, that, "Where was the spectrum sold? Is the dilution of equity share illegal? Is that a scam? Is the selling of shares at premium not a perfect economic activity?"

A senior merchant banker who is one of India's top advisors to corporate chiefs on foreign investments told, "Sibal's arguments are deceptive."

The finance wizard who has brought billions of dollars of investment from foreign investors in the last three decades added, "Sibal is arguing that Unitech and Swan sold their shares at premium which is legal economic activity. That's true. But, if these companies would not have got spectrum in their pockets no company in the world would have bought Swan or Unitech shares at fantastic premiums. The investors were paying high amounts to Balwa (Shahid Usman Balwa, promoter of DB group which runs Swan Telecom) and others only because they managed, by hook or crook, spectrums at highly discounted price from the government."

So the issue of fresh equity shares by the Indian telecom companies or dilution of shares by them was the 'bonus' they got for 'managing' the ministry, he noted. 

He also said, "This argument that there was legitimate sell of shares only will not hold water because prosecution can ask in the court: would the investors invest in similar companies but without spectrum license? The answer is no. The foreign investment has followed alleged corruption. The license from government enabled the company to attract investment."

He added, "According to me the vital question is was the cut-off date changed to accommodate the favourites of the minister? The answer seems to be yes. There seems no doubt that the cut-off date was changed and there lies the scam. Was it possible to get more money from the telecom sector than what A Raja got? The answer is yes. Instead of Raja's policy of 'first-cum-first serve basis' the auction would have got more money."

Sheela Bhatt