Will 2G juggernaut roll over an Ambani, Tata or Ruia?

Will the 2G spectrum scandal, which has landed some of the rich and powerful in jail and rattled the entire establishment, really find a logical culmination with the arrest and prosecution of the biggest names in Indian politics and business?

From Anil Ambani to Prashant Ruia to Ratan Tata, from M Karunanidhi’s family members to Sharad Pawar and even P Chidambaram and the Prime Minister, the media has been speculating on their sins of omission or commission which culminated in the arbitrary allocation of scarce second generation (2G) telecom spectrum by the then Communications Minister A Raja (now in jail) in 2007-08.

In a recent discussion with Karan Thapar at CNBC TV-18, Subramanian Swamy, the maverick Janata Party leader (with no followers), who has been fighting a dogged battle to prosecute the guilty in the scam, expressed his conviction that nemesis will catch up with Ambani and Tata. “ I am 100% certain that Mr Anil Ambani and Mr Tata will see the insides of a jail,” he said. Tax lawyer HP Ranina was less certain about Tata, but felt there was a strong possibility of Anil Ambani getting his just desserts.

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Swamy’s confidence stems from the fact that this time it is not a dodgy political leadership, but the Supreme Court itself, that is directing the Central Bureau of Investigation’s (CBI’s) probe. Prashant Bhushan, a Delhi-based lawyer activist, also wants to ensure that the law catches up with the high and the mighty. In an interview to Firstpost, he said: “The top honchos should not be allowed to go free. It is very likely that they will be prosecuted because the message is loud and clear from the people and the court: corruption will not be tolerated.”

[caption id=“attachment_7191” align=“alignleft” width=“380” caption=“Reliance ADA group chairman Anil Ambanihis appearance before a parliamentary panel in New Delhi. Ambani appeared before a parliamentary panel investigating a multi-billion dollar telecoms graft scandal that has rocked the country’s political and business establishment. Parivartan Sharma/Reuters”]  [/caption]

The first test will come as early as May 14, when the CBI special judge hearing the 2G cases decides whether Karunanidhi's daughter Kanimozhi should get bail on not. Significantly, that’s just a day after the Tamil Nadu election results - and that sends its own message. The Delhi high court has reserved another order from the ADAG executives who have moved the court against denial of bail.

Under relentless pressure from the court, now headed by the upright Chief Justice SH Kapadia, the government has been crumbling in case after case: the Commonwealth Games scandal, the flawed appointment of Central Vigilance Commission chief PJ Thomas (himself facing a charge-sheet) and, of course, the 2G case. (To understand the 2G scandal, here’s a Tehelka graphic).

But here’s the problem: when egregious crimes envelop the whole system, and the most powerful people in the land are threatened, it is a bit nave to presume that all that should happen will happen. The moot point is: will the system close ranks to stave off a threat to the all-powerful?There is some evidence of this already. When Kanimozhi was chargesheeted, it left out the names of her mother Dayalu Ammal, Karunanidhi’s wife. The apparent reason: she had no real knowledge of the workings of Kalaignar TV - which received a huge loan from a company associated with the 2G scam, and which the CBI says was really a payoff couched as a loan - despite being 60 percent shareholder. Interestingly, Kanimozhi’s whole case in seeking bail was that she was not active in managing the company named after her father. If the two owner-shareholders - mother and daughter - were not responsible for running it, who was?

The establishment is striking back in other ways too. When the Public Accounts Committee under BJP leader Murli Manohar Joshi looked set to castigate the PMO and the Finance Minister, the Congress teamed up with rivals BSP and SP to scupper Joshi’s plans. In the Commonwealth scam, while the Congress has been willing to sacrifice a Suresh Kalmadi, whom the party never liked anyway, it has been excessively protective of Delhi Chief Minister Sheila Dixit, who has faced criticism from the Shunglu committee which went into the issue of delays and corruption in awarding Games contracts by the Delhi government.

2G Spectrum Scam in India on Dipity.

The same dogged cussedness was in evidence when the Satyam scandal broke in 2009. Faced with the possibility of B Ramalinga Raju implicating the Andhra Pradesh Chief Minister YS Rajasekhara Reddy in his land deals just before a general election, the Congress leadership quickly sold the company to the Mahindras and let the larger probe meander into meaninglessness. While the Mahindras have settled the case in the US, in India, nothing much seems likely to come of it. The Congress has insulated itself from any fallout and went on to win the 2009 election.

It is also inconceivable that businessmen of the stature of a Ratan Tata or an Ambani can be incarcerated without denting business confidence in a big way. That’s the last thing the country can afford when growth is slowing and inflation is raging.

Will the 2G cases thus go the distance? Will the long arm of the law reach beyond the sacrificial goats and fall guys and get the big guns behind it all? A roll call of those arrested and/or charge-sheeted in the case includes Raja, the man at the centre of the scam, his close aides in the telecom ministry, plus CEOs and honchos of the Anil Dhirubhai Ambani Group (ADAG), DB Realty and Unitech Wireless. But these names represent either second-rung corporate powers or employee-executives who seldom act without the knowledge of the real owners of business.

For example, three of ADAG’s senior executives, including group managing director Gautam Doshi, and close Anil Ambani aides Surendra Pipara and Hari Nair, could not but have been acting on the orders of their boss. The main accusation against the ADAG group is that it had raised its stake in Swan Telecom - one of those favoured by Raja with spectrum - beyond 10 percent, in violation of licensing conditions for telecom which state that an existing operator (Reliance) cannot own more than 10 percent in another telecom company.But can mere executives take a decision to invest in another telecom company without the knowledge of the owner Anil Ambani? In fact, there is some evidence that only he could have approved the investment in Swan Telecom, which is alleged to have been a front company for ADAG to obtain more spectrum. When Swan got the spectrum, the loser was Tata Teleservices.

This is where the Tata group’s own lobbying strategy came into play. Manoeuvrings come into play. Enter Niira Radia, the Tata lobbyist, who had apparently openly campaigned for the inclusion of Raja in the 2009 United Progressive Alliance (UPA) ministry. The group has stoutly defended her, saying “all of Vaishnavi’s (Radia’s PR company) interactions with the government on behalf of the Tata group have been related to seeking a level playing field and equity in areas where vested interests have caused distortions or aberrations in policy.” In other words, Radia’s job was to get politicians to see the Tata point of view on telecom policy. Did she do it through friendly discussions and persuasion alone? The third - and core - nexus in the 2G case is the political one. Raja is in jail, but is it conceivable that he was perpetrating his scams for himself alone? It is worth recalling that his predecessor, DMK minister Dayanithi Maran, was removed by Karunanidhi when he fell out with the Marans. Raja, a friend of Kanimozhi, was inserted into the ministry at the insistence of the DMK patriarch. Is it, therefore, likely that Raja was generating slush funds from granting out-of-turn spectrum and keeping the moolah to himself? Or does the needle of suspicion point to the old man himself?

In the second charge-sheet filed by the CBI, the latter alleged that over Rs 200 crore was paid to Kalaignar TV, which is 60 percent owned by Dayalu Ammal and 20 percent by Kanimozhi. But Dayalu Ammal’s exclusion from the charge-sheet means the CBI may be sabotaging its own case by omitting the main owner of the company. Meanwhile, the bosses of the DB Realty group, the alleged bribe-givers to Karunanidhi’s family, are in jail. Can alleged bribe-givers be in jail and not the takers?

The fourth angle is the sin of looking the other way when a loot of the exchequer was on. This is where the then Finance Minister P Chidambaram and Prime Minister Manmohan Singh come in. When Raja was plotting to gift spectrum away at throwaway prices (presumably to benefit from a private payoff), the Finance Minister and even the Prime Minister were not in favour of Raja’s suggested method. They wanted scarce spectrum to be auctioned or sold at a high price. But when Raja defied the PM’s authority, the decision was left to the Finance Minister and Raja to take a final call. Why did Chidambaram buckle? How did Raja get his way? Why did the PM allow this loot?

[caption id=“attachment_7204” align=“alignleft” width=“380” caption=“Corporate lobbyist Niira Radia enters the Parliament complex in a car ahead of her appearance before a parliamentary panel in New Delhi on 4 April. B Mathur/Reuters”]  [/caption]

The stuff hit the fan only when the Comptroller and Auditor General looked at the whole scandal and came up with the figure of Rs 1,76,000 crore as the potential loss to the exchequer from the award of 2G spectrum at throwaway prices. Caught with its pants down, the Congress tried to implicate the BJP in the spectrum scam by claiming that Raja’s first-come-first-served policy of spectrum allocation was evolved during NDA rule. The BJP has much to hide, for it was the author of the the wireless-in-local-loop policy that allowed Mukesh Ambani to enter mobile telephony with a fixed wireless licence.

But ultimately, the question is this: with every political party compromised in some scam or the other, with all major businessmen looking embroiled in unsavoury activities, the establishment may find it convenient to close ranks.

The next few weeks will tell us whether this is going to happen or not. Kanimozhi’s case will show which way the wind is blowing. And so will the CBI’s follow-up charge-sheet in the Swan Telecom case which implicates the Anil Dhirubhai Ambani Group.