'Never seen so many zeroes'

This was the reaction of the Supreme Court to the numbers presented before it by the Income Tax department regarding the scandal estimated to be worth thousands of crores

The magnitude of the 2G spectrum scam hasn't befuddled only the common man. The feeling was also resonant in how the country's apex court reacted to the reports presented before it by the Income Tax department.


Tangled web: Former telecom minister A Raja (above) is one of the
accused in the 2G spectrum allocation scam. file pic

The department was reprimanded by the Supreme Court on Thursday for its slow investigation into alleged tax violations by companies linked to the scam. The judges said the numbers originally presented by the Income Tax department were "mind-boggling". Underscoring the point, they said, "We have never seen so many zeroes in our life. Not even half of what has been mentioned here except in school mathematics classes."

A bench of justices G S Singhvi and A K Ganguly directed the department to file a detailed report on action taken by it during the last three years when it got a complaint in this regard and began tapping corporate lobbyist Niira Radia's telephone. It also directed the department to share details of its findings with the Central Bureau of Investigation and the Enforcement Directorate.

Get moving
"The I-T department must be quicker. This is not a normal case of tax evasion. It (probe) should have been done fast. These are not ordinary cases to be handled in ordinary way," the bench said. The investigation began three years ago as a result of a complaint against corporate lobbyist Niira Radia. Her phones were then tapped and the conversations that were recorded played a starring role in unearthing the 2G scam. A Raja, who was then Telecom Minister and is now in jail, allegedly sold licenses and spectrum to companies at throwaway prices.

Sources say that tax officials are investigating Etisalat, Videocon, Uninor, and Loop for tax evasion. The source of funds for these companies is suspicious, according to officials, and their financial transactions seem deliberately complex.

The court also noted that investigations by the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) in the scam had been "fast-paced" so far, but said it would consider appointing a committee of eminent people to monitor their probe.

Fine print
Justice GS Singhvi and Justice Asok Kumar Ganguly asked the director general, income tax, to file a comprehensive report giving full details of its probe into the role of people in the scam, in particular from the time it got in October telephonic intercepts of corporate lobbyist Niira Radia. The judges granted the income tax department the liberty to approach the CBI special judge trying the 2G scam if they wanted to examine any official in custody. They also directed the department to supply copies of its status report to the CBI and ED.

Digging deep
The apex court said it would consider senior counsel Prashant Bhushan's suggestion for the appointment of a group of eminent persons to assist the court in monitoring investigation into the scam by the ED and the Central Bureau of Investigation (CBI). Senior counsel K.K. Venugopal, appearing for CBI, opposed a monitoring committee for now, saying it would mean expressing lack of confidence in investigation by the CBI.

He said officers of the CBI and ED would proceed to Mauritius with letters rogatory to track the money trail in the 2G scam. He said the court can wait till July when a further status report would be filed by the CBI and ED on their return from Mauritius. However, the court said it will hold further hearing May 13 on the plea by Prashant Bhushan seeking appointment of a monitoring committee.

'No effect'
With Kanimozhi set to appear before a CBI court in the 2G spectrum case, Congress on Thursday said action against DMK leaders in the scam will have no bearing on its ties with the Dravidian party. The party also dismissed suggestions that it was likely to succumb to ally pressure in this matter. "There is absolutely no question of party acting under any pressure. CBI is investigating the case under the Supreme Court monitoring...we feel our ties with DMK have continued for years seeing good and bad times. I do not think the on-going investigations in the 2G issue will have any adverse impact on Congress-DMK ties," party spokesperson Jayanthi Natarajan told reporters in Delhi.

Action taken
February 2, 2011: CBI arrested former Telecommunications Union Minister A Raja. The CBI also arrested RK Chandolia, Raja's personal aide, and Siddharth Behura, the former Telecom Secretary. Both A Raja and RK Chandolia are heard in conversation with Niira Radia in the released Radia tapes.
February 8, 2011: CBI arrested Mumbai based Dynamix Balwas (DB) group managing director Shahid Usman Balwa in connection with the 2G spectrum allocation scam. The CBI has evidence from the Income Tax department that Shahid Usman Balwa, considered close to A Raja, was instrumental in channelling the kickbacks allegedly received by the former telecom minister.
March 29, 2011: In Delhi, the CBI arrested Asif Balwa (younger brother of the arrested former Managing Director of DB-Etisalat Group, Shahid Balwa) and Rajeev Agarwal for their alleged involvement in money transfer to the Dravida Munnetra Kazhagam's (DMK) Kalaignar TV channel.
April 2, 2011: CBI filed its first 80,000 page chargesheet in the 2G spectrum scam before a Special Court in Delhi naming nine individuals and three companies. It said the wrongful acts of the accused deprived the government exchequer of possible revenues amounting to Rs 30,985 crore. The persons named are A Raja, arrested former Telecom minister, Siddharth Behura, arrested former Telecom Secretary, RK Chandolia, A Raja's arrested former personal secretary, Shahid Usman Balwa, arrested former Director of Swan Telecom (now Etisalat DB), Sanjay Chandra, Managing Director of Unitech Ltd and Unitech Wireless, Gautam Doshi, Group MD, Reliance Anil Dhirubhai Ambani Group, Hari Nair, Senior Vice-President, Reliance Anil Dhirubhai Ambani Group, Surendra Pipara, Senior Vice-President, Reliance Anil Dhirubhai Ambani Group and Reliance Telecom Ltd and Vinod Goenka, Director, Swan Telecom and Managing Director of DB Realty.

What's the 2G scam?
The scam relates to irregularities in the allocation of airwaves to telecom firms that allegedly caused huge losses to the national exchequer. Several corporate bigwigs besides former communications minister A Raja are in jail because of the scam. In 2008, the country issued 122 new telecom licences and the second-generation radio spectrum bundled with it to several domestic companies that had little or no experience in the telecom sector, and at a price set in 2001. The state auditor said that the allocation process did not reflect the correct value of radio spectrum as there was no auction and the entire process was flawed, benefiting selected companies. The auditor said that the telecoms ministry did not do the requisite due diligence, granting 85 out of the 122 licences to ineligible applicants. The auditor also said the ministry did not follow its own guidelines, changed the cut-off date for applications, which gave "unfair advantage" to some companies over others. It said that the entire process "lacked transparency and was undertaken in an arbitrary, unfair and inequitable manner". The auditor said that several companies deliberately suppressed facts, disclosed incomplete information, submitted fictitious documents and used fraudulent means to get licences and thereby access to spectrum.