Place Judge O.P. Saini's trial court in Delhi's Patiala House courts. Prime accused in the 2G spectrum case A. Raja, clad in crisp white trousers and shirt, is in conversation with dmk chief M. Karunanidhi's daughter Kanimozhi, wearing a blue salwar kameez.
Time It is only days before Dayanidhi Maran's fall from grace, which ultimately resulted in his exit from the UPA Cabinet for the second time in seven years. A visitor known to Raja enters the courtroom, catches his eye and greets him. Raja asks a direct question: What is happening? When told that Dayanidhi is set to follow him and Kanimozhi to Tihar Jail, the former Union telecommunications minister is delighted. Raja then leans over and tells Kanimozhi in Tamil that Maran is next. Kanimozhi, serious till then, beams. Then Raja blurts out: "He has been making a fool of thatha (grandfather, a term of endearment for Karunanidhi) for so long. It's high time the law caught up with him."
A short drive from the Patiala House courts, from his corner office on the 11th floor of cbi's spanking new headquarters, Director A.P. Singh is giving shape to the final push in the ever-enlarging 2G investigation. The probe now covers all telecom irregularities between 2001 and 2007 but the focus is clearly on Dayanidhi's role in the Aircel-Maxis deal and how Loop was merely a front company for Essar.
Based on the report of the Justice Shivraj Patil one-man committee (OMC), formed in December 2010 to go into the issuance of telecom licences and allocation of spectrum between 2001 and 2009, CBI is now coming around to the view that Dayanidhi in his tenure as telecom minister between May 2004 and May 2007 caused a loss of approximately Rs 10,505 crore to the exchequer.
The OMC says a principal beneficiary of Dayanidhi's largesse was Maxis-owned Aircel, which saved about Rs 1,400 crore on account of award of licences in 14 service areas at 2001 prices and another Rs 750 crore through allotment of excess spectrum in Tamil Nadu. Former Aircel owner C. Sivasankaran's deposition to the CBI on the fire sale of his company to Maxis at Dayanidhi's behest, along with evidence provided by two Department of Telecom (DoT) officials of the time-P.K. Mittal and RJS Kushwha, senior deputy director-general and joint wireless adviser, respectively-has helped the CBI build a strong case in nailing Maran's other misdemeanors:
Twenty-five Unified Access Service (UAS) licenses were granted at prices set in 2001, which according to the CAG was in violation of a 2003 Cabinet decision. They cost the government Rs 1,650 crore.
Spectrum was allotted to operators up to 10 Mhz without any policy guidelines or fees. Allotment of excess spectrum helped operators save about Rs 3,000 crore while the government lost around Rs 980 crore.
Concessions were granted to National Long Distance (NLD) operators without seeking trai input or approval from the Telecom Commission and the Cabinet.
Concessions were also granted to International Long Distance (ILD) operators without seekingTRAI, Telecom Commission and Cabinet approval. All in all, the Government lost Rs 2,865 crore due to the reduction of the entry fees for grant of NLD and ILD licenses. In addition, it lost about Rs 5,000 crore during 2004-2010 due to the reduction in licence fees.
Pursuing the Aircel-Maxis deal, CBI called in top Standard Chartered executive Prahlad Shantigram. The bank structured Maxis's acquisition of Aircel. Shantigram was asked to corroborate Sivasankaran's version that he was coerced into selling the company to Malaysian firm Maxis Communications Berhad. The CBI is also looking at the entire transaction in greater detail because it believes that FDI regulations may also have been breached. Moreover, Sindhya Securities & Investments, owned ostensibly by P. Dwarkanath, son-in-law of Apollo Hospitals Group Chairman Prathap Reddy (he's married to Suneeta Reddy, Joint MD of Apollo Hospitals), is also under scrutiny. It holds 26 per cent stake in Aircel.
RS 48 LAKH IN STAMP DUTY NOT PAID
There is more trouble in store for the Marans. India Today is in possession of documents that show that the Rs 5,000-crore Sun Group evaded stamp duty to the tune of Rs 48 lakh while purchasing land for its headquarters in 1999.
Chairman and Managing Director of Sun Group Kalanithi Maran had bought 1.65 acres belonging to the Madras Stock Exchange, in the name of Sumangali Publications, on August 23, 1999, for Rs 11.70 crore in Chennai's posh MRC Nagar. The guideline value (the base rate fixed by the Government) on that date was Rs 2,346 per sq ft. The property should therefore have been registered for Rs 16.87 crore. But it was purchased for only Rs 11.70 crore,way below the guideline value.
Also, Sumangali Publications was supposed to pay 13 per cent as stamp duty to the government in 1999, which comes to Rs 2.19 crore as per the guideline value. But it paid only Rs 1.71 crore, thus causing a revenue loss of Rs 48.26 lakh to the government. A 10-storey building called Murasoli Maran Towers housing the entire Sun Group office has been raised on the land.
- By Lakshmi Subramanian
Meanwhile in Chennai, yet another front has opened against the Marans. On July 13, the police summoned Sun Network Chairman Kalanidhi Maran, Dayanidhi's elder brother, after distributors accused him of criminal intimidation and cheating. Kalanidhi refused to appear before the police and asked for time till July 26. Between a persistent CBI and a tough Chief Minister, J. Jayalalithaa, the Maran brothers are caught in an unrelenting pincer. A string of cases has been filed against Sun Pictures with high-profile CEO Hansraj Saxena being sent to jail.
This is not Dayanidhi's first brush with trouble. He was dumped from the Cabinet on May 17, 2007, after an internecine feud broke out over Maran-owned newspaper Dinakaran running a survey that placed Dayanidhi ahead of M.K. Alagiri, Karunanidhi's elder son, in the DMK pecking order. All hell broke loose and goons ransacked the Dinakaran office, resulting in three deaths. There was also talk that the Tatas were unhappy with Dayanidhi as telecommunications minister, a fact borne out by Niira Radia's tapped telephone conversations. In May 2009, when UPA II's Cabinet was under discussion, Raja was preferred for telecommunications over Dayanidhi who, after being a outcast for two years, made the cut for textiles by endearing himself to the party patriarch once again. The campaign against Dayanidhi helming telecom is clear from the Radia-Ratan Tata conversations. An excerpt:
Radia Our good friend Dayanidhi is in the running for a Cabinet post.
Tata Oh God.
Radia He has asked for nothing less than railways or agriculture.
Tata Because if he gets telecom, it will really be a disaster.
Radia It will be a disaster Ratan, telecom or power.
Tata Raja one can live withâ€¦because then Maran will settle scores.
Dayanidhi did not just armtwist Sivasankaran into selling his company to Maxis, he also manipulated policy by getting the prime minister to modify the terms of reference (ToR) of the GoM (see box on next page) on the issue of spectrum pricing and include within it vacation of spectrum for digital terrestrial broadcasting. Digital terrestrial broadcasting was not a part of the original tor of the GoM issued on February 23, 2006. Dayanidhi got it included in the final tor cleared by the prime minister on December 7, 2006. This benefited Sun TV's cable business under Sumangali Cable Vision, in a clear conflict of interest.
Maxis's takeover of Aircel, which Dayanidhi is accused of engineering, falls afoul of the rules of foreign direct investment in telecom, which cap FDI at 74 per cent. The T. Anand Krishnan-owned Malaysian company, through its wholly owned subsidiary Global Communication Services Holdings Ltd, invested Rs 7,880.82 crore in Aircel.
By CAG's calculation, Maxis holds an aggregate stake of 97.5 per cent in Aircel, of which 96.7 per cent is held directly and 0.8 per cent through its holding in Deccan Digital. Sindhya Securities & Investments holds 74 per cent in Deccan Digital which, in turn, holds 35 per cent stake in Aircel. While Maxis paid Rs 7,880 crore for its 74 per cent stake, Sindhya paid a meagre Rs 34 crore for its 26 per cent.
So, how did the Marans benefit? In April 2007, just four months after Aircel was issued telecom licences, Anand Krishnan, through one of his group companies, South Asia Entertainment Holding Ltd (SAEHL), a subsidiary of Astro All Asia Networks Plc, announced an investment of $166 million in Sun Direct. Accordingly, SAEHL acquired 7,84,22,964 equity shares representing a 20 per cent stake for Rs 625 crore. Further, Maxis also invested Rs 100 crore in the Sun FM Radio Network. This time, the vehicle was different. Maxis used South Asia Multi-Media Technologies Ltd, which invested Rs 50.07 crore for a 20 per cent stake. Maxis also invested over Rs 46.70 crore in preference shares.
This is the worst crisis that the Marans have faced. Their dream run, from the time their father Murasoli Maran became a Central minister in 1989, may be coming to an end. It remains to be seen how the siblings bounce back.