Cable controversy in Punjab: Why Sidhu is fast and furious on Fastway?

In an election fought against business interests of the Badal family, the Congress promised both sops and clean-up of the system by ending the family’s “monopoly” – from roads to airwaves. The transport policy unveiled this week tried to rein in Badal buses, but the Amarinder Singh government is still to bring the promised law to end the “monopoly” of Fastway, patronised by the Badals, over cable business. Local bodies minister Navjot Sidhu has, however, launched a tirade against the company’s alleged tax evasions running into crores, forcing the CM to warn it of action “if found guilty of violations”. HT explains the controversy and its many actors.

What is the Fastway controversy?

Fastway Transmissions is a multi-system operator (MSO) started by Ludhiana-based Jhujhar Transport owner, Gurdeep Singh, after the Badals came to power in 2007. Through aggressive expansion, it made majority of local cable operators buy its signal, edging Siti Cable, owned by Zee group, out of competition. The Congress had then alleged that it monopolised the business under patronage of then deputy CM Sukhbir Badal, who “promoted” his PTC group of channels and blocked access to other Punjab-based news channels such as Zee Punjabi and Day and Night.

What does Navjot Sidhu want?

Sidhu, who had a running political battle with the Badals, wants Fastway’s monopoly to end. He has accused it of evading state taxes such as entertainment tax and sales tax, and charges for using electricity poles for overhead cable and road digging for laying optical fibre. He has demanded a vigilance inquiry. Sidhu is also claiming a bigger scam in evasion of central taxes, mainly service tax.

Why is Sidhu after Fastway?

Badal-bashing being his USP, Sidhu was restless to get down to his agenda of taking them on. But Amarinder said he would not indulge in political vendetta. All Sidhu needed was a tax that fell within his purview and used “unpaid” road cutting charges payable to department of local government to go after Fastway. He has written to other departments, including those under the CM, to probe and penalise it.

Does he have evidence to buttress his allegations?

Sidhu’s evidence, particularly his charge of Fastway underreporting its TV connections to avoid tax liability, is mostly based on a deductive theory than facts on record. Reliance Jio has yet to respond to charges that Fastway “bullied” it to lay its optical fibre in Punjab for free. His tax evasion figures are estimates. No documentary evidence has been shown. The extent of evasion of central taxes is based on allegations.

What law did the Congress promise?

The Congress had promised to end the monopoly over the transmission of TV channels by bringing the cable business regulation law.

Why is Amarinder soft-pedaling?

Amarinder wants to ruffle no feathers, not the least of the Badals, and is flip-flopping on several promises. Even if he wants to hit business interests of the Badals, Captain may not want to be seen as the hand behind it. But he may not be too happy to let Sidhu set the agenda of governance.

What are Badals’ stakes in the controversy?

They have stayed away from the controversy so far, but the links between Fastway and Sukhbir’s PTC are not hard to find. Mumbai-based JS Kohli and Yogesh Shah had joined hands with Gurdeep to roll out Fastway in 2007. The two were also the founders of PTC. However, they ceased to be directors of PTC in 2010. The cartelisation of cable network had ensured promotion of PTC, a mouthpiece of the Badals.

What does Fastway have to say?

It has rebutted the minister’s all charges, showing agreements, filings and permissions for its dealings with Jio, laying underground cable, number of TV connections. It also claims to have permission for using electricity poles.

What next?

Though it has answers to allegations on paper, Sidhu has bound Fastway in knots by raising lapses such as non-reversal of credit availed on central value-added tax (CENVAT) on set-top boxes and cancelling of invoices. In this maze of tax details, it would finally come down to how credible are Sidhu’s sources and how efficient are the tax consultants of Fastway.