If Maran is in trouble over Maxis deal, it's because he got a free run under Manmohan

A key U-turn by Manmohan Singh enabled Dayanidhi Maran to run the communications ministry like a personal fief in UPA-1 - which is why Maran may now be prosecuted by the Central Bureau of Investigation (CBI).

Attorney General Mukul Rohatgi told the CBI a few days ago that there was enough dope to prosecute the Marans of Sun TV in the Aircel-Maxis deal. The main charge against Dayanidhi Maran is that he pressured C Sivasankaran, owner of mobile services operator Aircel, to sell his stake to Malaysian-Indian entrepreneur T Ananda Krishnan’s Maxis group.

What enabled this and subsequent scams perpetrated by Maran’s successor was Manmohan Singh’s decision to go back on his decision to let a group of ministers (GoM) decide telecom spectrum issues, including pricing. But under pressure from Maran, Singh took the brief away from the GoM and made Dayanidhi the sole arbiter in telecom licensing and spectrum policy.

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A Tehelka story in 2011 explains how this happened. “On 23 February 2006, with the approval of Prime Minister Manmohan Singh, a Group of Ministers comprising the Minister for Defence, Minister for Home Affairs, Minister for Finance, Minister for Parliamentary Affairs and (the) Telecom Minister was constituted to look into various issues concerning effective and optimum usage of spectrum. The terms of reference also included suggesting a spectrum pricing policy.” The defence ministry was involved because it was supposed to vacate some spectrum that the telecom ministry was later to allot to service providers.

But just five days later, Maran wrote to the PM and got this order reversed. Telecom licensing and spectrum pricing were effectively moved out of the GoM’s purview, and Maran became the sole arbiter of its fortunes. Maran’s letter to the PM suggests that the PM had already agreed to let Maran have his way, but tried half-heartedly to change his mind later after understanding its implications. But Maran held firm and the PM backed off.

This is what Maran said in his letter to PM: “You may recall my meeting with you on 1st February 2006 when we had inter-alia discussed the issue of the Group of Ministers relating to the vacation of spectrum by Defence. You had kindly assured me that the Terms of Reference of the GoM would be drawn up exactly the way we wanted, which was to focus only on the issue of vacation of spectrum. I am, however, surprised to note that the GoM as constituted has much wider Terms of Reference, some of which I feel impinge upon the work normally to be carried out by the ministry itself. I shall be grateful if you could kindly instruct the concerned to modify the Terms of References suggested by us which are enclosed.”

The PM changed his own order allocating the work on spectrum to the group of ministers. And Maran used this leeway to run the ministry his way.

Maran is alleged to have pressured Siva by sitting on the latter’s applications for more telecom circles along with spectrum. These licences were given in double-quick time once Maxis got control of the company.

In return for this “favour”, the Maxis group was supposed to have invested money in Sun Direct, a direct-to-home venture of the Sun TV group owned by Dayanidhi’s brother Kalanithi Maran. The quid pro quo is alleged to be the pricing of the deal, which had an element of payoff, since Sun Direct had no business at the time of the investment.

As the Tehelka report of 2011 noted, “four months after the licences were granted to Aircel (which was taken over by Maxis), Ananda Krishnan (Maxis Group owner), through one of his group companies, South Asia Entertainment Holding Ltd (SAEHL), invested $150 million in a phased manner in Sun Direct TV Pvt Ltd by acquiring 20 percent equity in the company owned and run by Dayanidhi’s brother Kalanidhi and his wife Kaveri Maran. The equity investment was cleared by the Cabinet Committee on Economic Affairs.”

But, as _Firstpost_ noted in 2011 , this is not the only dubious action on which the Marans face scrutiny. Another one, unearthed by S Gurumurthy and published in The New Indian Express around the same time, talked about how Dayanidhi misused his powers as minister to give Sun TV an exclusive telephone exchange with 323 lines, yielding huge costs savings for the company.

Gurumurthy, quoting a CBI report, alleged that Dayanidhi got “all the 323 home lines listed not in his name but in the name of the Chief General Manager, BSNL, Chennai. These lines virtually constituted a telephone exchange in the minister’s home. It was exclusively used for his family business by laying a 3.4-km-long secret cable along public roads to connect the lines to the business premises (of Sun TV). This had caused huge loss to BSNL….The CBI, which probed the fraud, wrote to the Secretary, Telecom, on 9 September 2007 recommending action against Maran for the fraud.”

Now why would a Maran, with crores at stake in Sun TV, want to save money on a few phone lines?

Well, it wasn’t just that. Says the Express report: “They were no ordinary telephone lines, but costly ISDN lines, which could carry tons and tons of TV news and programmes faster than satellites to any part of the world. These lines, the CBI says in its report, are ’normally used by medium to large commercial enterprises to meet special needs such as video conferencing, transmission of huge volume of digital data of audio and video’ - precisely the facility that Sun TV would need for its telecasting operations. For this, the Sun TV would have paid huge cost. But it got it all free, at government’s cost.”

Gurumurthy quotes the CBI as saying that the Maran home exchange was “programmed in such a way that no one other than the authorised BSNL staff were aware of the existence of such an exchange created for his [minister’s] exclusive use”….By linking the minister’s home and Sun TV office by the stealthy cables, “it would appear as if the lines were used in the residence of the former minister, but actually the cables laid facilitated Sun TV network to utilise the services of BSNL provided at his residence”.

If the CBI does not pull its punches, the Marans have a lot of trouble coming their way.