Jailed former telecom minister A Raja’s widely anticipated move to drag Prime Minister Manmohan Singh and the then finance minister, P Chidambaram, in the 2G spectrum case on Monday appeared to have given the Opposition a handle against the government days ahead of the monsoon session of Parliament.
Raja's lawyer told the special court that the matter related to sale of equity by companies (selling their stake or diluting shares through issue of fresh equity), which had bagged spectrum licences was discussed with the Singh and Chidambaram.
"The then finance minister who is now home minister had said in front of the Prime Minister that dilution of shares does not amount to sale of 2G licence as per the corporate law…Let the Prime Minister deny this," his lawyer told the court.
This sparked off BJP president Nitin Gadkari's demand for their resignations. "A Raja has himself disclosed and admitted that the Prime Minister and then finance minister were in the know of all this. The two must resign," he said.
The government and the Congress party closed ranks and in defence of Manmohan Singh and Chidambaram. Telecom minister Kapil Sibal mocked Gadkari's understanding of legal issues. "Raja's statement in court cannot be taken as evidence against the government. It is unfortunate that the president of a national party demanded the resignations on the basis of arguments made by an accused in the court. He (Gadkari) should have consulted Arun Jaitley or some other lawyer."
On the allegations that two new telecom licencees -- Unitech and Swan-- divested their equity at massive premiums, Sibal said that “there was no disinvestment and it was only dilution of stake by bringing in additional equity”.
Asked whether the Prime Minister knew about the dilution of equity, Sibal replied: “Yes, the Prime Minister knew that it was dilution of equity by way of issuing new shares and there was no divestment of promoters' equity.”
In his defence, Chidambaram said that the only issue examined by him as finance minister in 2007 and by the Prime Minister was if the two new telecom licencees Swan and Unitech were divesting their stakes.
"The question was whether it was divestment (sale) of promoter's equity or dilution of equity by issue of fresh shares... This was examined by the finance ministry. Both were cases of dilution of equity by issue of fresh shares,” Chidambaram said.
The Congress party slammed Raja for dragging Singh into the controversy. “The accused can say anything in his defence, it is a very sad day for Indian democracy if we start giving unnecessary reliance on such comments of an accused trying to present his case,” said party spokesperson Manish Tewari. Defending the Prime Minister, he said: “Putting an allegation on him is like trying to spit on the sun.”