Telecom secretary Siddharth Behura has refuted the chief vigilance commissioner's (CVC) charges that Swan and Unitech have sold equity to foreign companies.
In a strongly-worded letter to the Prime Minister's Office (PMO), Behura has cited the finance ministry's views on the issue to argue that the case is one of raising capital rather than a sale of promoters' stakes. Existing players like Bharti Airtel and Essar have previously raised capital in a similar manner, the letter points out.
“The finance ministry has also concurred that it is a case of dilution of equity and not sale of equity of promoters. It is a normal practice in the corporate world to bring in investment in the company for rolling out or expansion of business,” the letter says.
“On earlier occasions also FDI has been induced in licensee companies as per FDI policy of the government such as by Singtel in Bharti and Hutchison/Vodafone in Essar.”
On the issue of spectrum allocation on a first-come, first-serve basis, Behura says in his letter that this is in keeping with the existing policy as well as recommendations of the Telecom Regulatory Authority of India (TRAI), adding that the department of telecom (DoT) is willing to make a presentation before the CVC on the issue.
“First-come, first-served allotment and one time fixed charge had its genesis in the TRAI recommendations in the interest of the twin government objective of rapid telecom penetration at reasonable costs,” Behura's letter says.