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2G case: Some relief for Chidambaram but no comfort for govt

Agencies  New Delhi, February 02, 2012
First Published: 09:12 IST(2/2/2012) | Last Updated: 08:46 IST(4/2/2012)

The Supreme Court on Thursday left it to the trial court to decide on the demand for investigation of the alleged role of home minister P Chidambaram into the 2G spectrum allocation scam but refused to give direction to CBI on the issue.

Disposing of the petitions filed by Subramanian Swamy seeking a direction to the CBI to probe the alleged role of Chidambaram, a bench comprising justice GS Singhvi and justice AK Ganguly said that its order should no way influence the proceedings before the trial court.

Responding to a plea by Janata Party leader Subramanian Swamy, it also imposed varying costs on other companies.

It left the matter of a probe into the role of Chidambaram - another petition by Swamy - to the trial court, adding that the CBI was free to investigate if it chose to do so.

"The court has said the government must now get the market value of these licences and the profit from the same should be set aside for legal aide and for ex-defence personnel," a jubilant Swamy told reporters.

The apex court said that the trial court should decide the matter within two weeks.

In another major development having implications for the corporate sector, the Supreme Court also cancelled the 122 2G spectrum licences granted by former telecom minister A Raja on the ground that they were issued in a "totally arbitrary and unconstitutional" manner.

Imposing a fine of Rs. five crore each on three telecom companies, which offloaded their shares after getting the licenses, the court directed regulator Telecom Regulatory Authority of India (TRAI) to make fresh recommendations on allocation of 2G licences.

Asking the government to take steps on the recommendations of TRAI within a month, a bench comprising justice GS Singhvi and justice AK Ganguly said the allocation of spectrum will be done through the policy of auction within four months.

The order came on petitions filed by NGO CPIL and Janata Party President Subramanian Swamy alleging scam in the allocation of spectrum licences by Raja in January, 2008 during the tenure of UPA-I government, on which the CAG had assumed the presumptive loss of upto Rs. 1.76 lakhs.

The 122 licences were given by Raja for over Rs. 9,000 crore, while 3G auctions for a smaller number of licences had fetched the government a sum of Rs. 69,000 crores.

The companies that are set to lose on account of the cancellation of the licences are Uninor (joint venture between Unitech and Telenor of Norway), Loop Telecom, Sistema Shyam (joint venture between Shyam and Sistema of Russia), Etisalat DB (joint venture between Swan and Etisalat of UAE), S Tel, Videocon, Tatas and Idea.

Among the 122 licences issued by Raja in January 2008 on first-come first-serve basis, Uninor was alloted 22 pan India licences, Loop 21, Sistema-Shyam 21, Etisalat-DB 15, S Tel 6, Videocon 21, Idea 9 and Tatas 3.

Reacting to the Supreme Court judgement Uninor, which has launched services in most of the circles, expressed shock and said that the company has been treated unfairly.

"We have been unfairly treated as we simply followed the government process we were asked to. We are shocked to see that Uninor is being penalised for faults the court has found in the government process," the company statement said.

Noting that the order has not stopped the company operations for now Uninor said "we expect the authorities to ensure that our 36 million customers, 17,500 workforce and 22,000 partners are not unjustly affected."

Other new operators said that they would examine the order before commenting on the future course of action.

With the entire 2008 spectrum allocation all but nullified and elections to five states under way, the opposition seized its opportunity to renew its demand for the home minister's resignation.

BJP leaders spoke out in chorus against Chidambaram and sought Prime Minister Manmohan Singh's intervention in the case involving award of telecom spectrum to private players, which investigators say was done in a fraudulent manner causing massive losses.

"The finance minister is the custodian of the public exchequer. It is the prime responsibility of finance minister to ensure that there is no loot of public money," Arun Jaitley told reporters in Lucknow.

"The CBI has elaborately argued for days together that the role of Chidambaram need not be investigated. Therefore, the upfront of today's order is that his role has to be investigated," added his colleague Ravi Shankar Prasad.

The ruling, just two days after the Supreme Court castigated the Prime Minister's Office (PMO), for delaying the prosecution of Raja, could not have come at a more difficult time for the government with the crucial Uttar Pradesh elections less than a week away.

The government will examine the judgment and its implications," finance minister Pranab Mukherjee, the government's chief troubleshooter, said.

While the government battled the inevitable political consequences, there were other implications too, particularly for millions of subscribers and investors.

Stocks of firms that face cancellation of telecom licences fell sharply even as those of one established player registered hansome gains.

Experts also sought to clarify the position. Mobile number portability (MNP), which is in full force across the country, would help customers migrate without much trouble to an operator unaffected by the order.

"Basically, the time period of four months is the time for government to decide to come up with a enhanced market mechanism," Rajan Mathews, director general, Cellular Operators Association Of India (COAI), said.

The order does not affect companies that were granted licences before 2008; 3G services for which licences were auctioned would also not be interrupted.

(With inputs from PTI, IANS, Reuters)

Read the full SC order here | SC refuses to ask CBI to probe Chidambaram's role | Chidambaram should resign: BJP | SC said nothing against Chidambaram: Congress | Sibal meets PM after 2G verdict | BJP demands Chidambaram's resignation


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