CBI may have enough on Maran to ask for his arrest

After Raja, Dayanidhi Maran may be the next DMK minister to face arrest for his alleged role in the 2G scam. The CBI believes its case against him is strong.

R Jagannathan October 10, 2011 14:15:53 IST
CBI may have enough on Maran to ask for his arrest

With the Central Bureau of Investigation (CBI) filing a first information report (FIR) against former Communications Minister Dayanidhi Maran, the stage is set for his formal arrest shortly. Maran will be the second former cabinet minister to face arrest after A Raja, who succeeded Maran as communications minister in May 2007.

CBI sources, who believe their case against Maran is as strong as, if not stronger than, the one against A Raja, say they have seized several documents from the raids on Maran’s premises in Delhi and Chennai on Monday. Firstpost has access to some of these documents and the story that emerges is that Maran helped the promoters of Aircel – the Malaysian Maxis Group – with licences and spectrum for a consideration of around Rs 625 crore.

Maran, who was the youngest cabinet minister at 38 when he joined the UPA government in 2004, allegedly pressured C Sivasankaran to sell his stake in Aircel to T Ananda Krishnan, owner of Maxis. Sivasankaran’s requests for licences and spectrum were delayed to add to the pressure to sell to Maxis.

CBI may have enough on Maran to ask for his arrest

CBI sources, believe their case against Dayanidhi Maran is as strong as, if not stronger than, the one against A Raja.

The CBI first information report mentions Dayanidhi Maran, his brother and Sun TV owner Kalanithi Maran, T Ananda Krishnan, and Astro All Asia Networks CEO Ralph Marshall. The agency has already sent a Letter Rogatory (a judicial request for help on information from another country) to Malaysia to ascertain the details of Maxis Communications’ ownership structure and for information on the group’s other companies, including Astro All Asia Networks.

The following, according to the CBI, is the chronology of the conspiracy allegedly hatched by Dayanidhi Maran:

• C Sivasankaran, who earlier owned Aircel (then known as Dishnet Wireless Ltd), had applied for spectrum in 2004 and 2005 for six circles See document.

• Maran choked Sivasankaran by sitting over his applications for nearly two years and thus forced him to sell Aircel to Malaysia-based Maxis Group.

• On 23 February 2006, the UPA government set up a Group of Ministers and authorised it to decide on the pricing of spectrum. 

• Five days later, on 28 February 2006, Maran wrote to Prime Minister Manmohan Singh strongly objecting to GoM’s power to decide on the spectrum pricing issue. He said GoM should focus its efforts on getting defence to vacate spectrum, and pricing should be left to his ministry. See documents

• In November 2006, when Aircel was with T Ananda Krishnan, Maran released spectrum to Aircel.

• On 5 April 2007 – before Maran left the communications ministry — a Maxis Group media company, Astro All Asia Networks, through South Asia Entertainment Holding Ltd, invested US $166 million (Rs 625 crore) in Sun Direct TV Private Ltd owned by Dayanidhi Maran’s brother Kalanithi Maran.

• Maxis Group invested Rs 625 crore for a 20 percent stake in Sun Direct, when Kalanithi allocated 80 percent of the shares to himself at just Rs 10 per share.

• At the price at which Maxis bought its Sun Direct stake, the company was being valued at Rs 2,700 crore when it had not even rolled out its direct-to-home services. Tata Sky and Dish TV, which had over 15 lakh subscribers each and a 50:50 share of the DTH market, were valued at much less than Rs 2,700 crore. CBI thinks Sun Direct TV overvalued itself to camouflage the consideration received from Maxis Group.

• In its quarterly report, Astro All Asia Networks said: “Sun Direct TV, the DTH joint-venture in India, is on track for a service rollout by end 2007/early 2008. Typical of similar start-ups, the business is expected to incur losses… The group expects to account for its share of Sun Direct TV losses of up to US $166 million representing its 20 per cent equity stake, over a period of five years.’’ See document 1 and See document 2.

• Maxis Group also invested Rs 100 crore in Sun FM Radio Network and acquired a minority stake of 20 percent.

• Aircel had only two telecom licences till 2004, but by 2006 it sold licences and spectrum at 2001 prices in 21 more circles, making it a pan-India operator. The licence period of Aircel for Chennai Circle was also extended without any fee.

• Aircel benefited through the allotment of excess spectrum of 3.6 MHz, which was beyond the upper limit laid down in the Unified Access Service Licence (UASL), which, according to the Comptroller of Auditor General, caused a loss to the public exchequer of Rs 75 crore.

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Maran served as communications minister for three years. He fell out of favour with his grand uncle, DMK supremo M Karunanidhi, in May 2007 and was forced to resign. His place was taken by Andimuthu Raja, now in jail. However, by 2009, the relationship with Karunanidhi had been mended, and Maran returned to the Union cabinet as textiles minister. He was forced to resign again in the wake of the CBI’s investigations against him in the 2G spectrum scam.

Maran’s tenure as communications minister was notable for dropping call rates and the decision to raise the foreign direct investment limit to 74 percent. But it also set the stage for possible spectrum scandals later.

Initial CBI investigations suggest that 2G spectrum money worth Rs 1,000 crore may have been traded during Maran’s term. During his tenure, Maran allocated over 70 bits of spectrum to GSM (Global System of Mobile) operators.

Sivasankaran launched the Aircel brand in Tamil Nadu after he bought over RPG Cellular in Tamil Nadu and cornered over 2.2 million subscribers in quick time.

CBI may have enough on Maran to ask for his arrest

Dayanidhi Maran will be the second former cabinet minister to face arrest after A Raja (above), who succeeded Maran as communications minister in May 2007. AFP

That was just four months before Maran came in as communications minister. Maran’s antagonism to Sivasankaran is traced to the time when he aligned himself with the Tata group, which had a tieup with Rupert Murdoch’s direct-to-home project, Tata Sky. The latter was in direct competition with the Sun Network owned by Kalanithi Maran, and had already got a head start over Sun Direct in DTH.

The CBI believes that Maran targeted the Tatas and Aircel immediately after he took over as minister. Though Siva was known for launching new projects and then selling them for a big gain, his sudden exit from Aircel caught the CBI’s eye. A year after Maran took over, Sivasankaran sold his stake to Maxis Communications and the Reddys of the Apollo Group of Hospitals for Rs 4,700 crore.

Reddy came close to the Maran family in 2000, when Dayanidhi’s father Murasoli Maran was miraculously saved from a rare cardiac condition, “hypertrophic obstructive cardiomyopathy,” by the Chennai Apollo Hospital. “I have got my life back. I am really proud of this world-class institution,’’ said the senior Maran on the day he was discharged after a 34-day stay in the hospital.

Maxis, which holds a 74 percent stake in the Aircel group, also has a sizeable investment in Sun Network thorough its sister concern Astro. Apollo’s Dr Pratap C Reddy and his family theoretically control 26 percent in Aircel – but Maxis is probably the real beneficial owner of the bulk of the Reddy stake.

In 2004, when the Tatas joined hands with Sivasankaran’s Dishnet Wireless Ltd (now Aircel), Dishnet sought more UASL licences. The then telecom secretary had endorsed the application, but Maran’s office put up a note demanding details that were 'vague' and 'irrelevant', according to the Justice Shivraj V Patil Committee. The committee’s mandate was to look into procedural lapses during 2001-09 in the communications ministry.

But once Siva was out, the Marans cleared spectrum for Dishnet Wireless in Kolkata within a day. Dishnet had a cellular service in West Bengal, but it did not have enough spectrum. On 4 April 2007, a proposal was put up for the allocation of spectrum, and Telecom Secretary DS Mathur cleared the proposal within a day with the noting that the matter had been discussed with the minister.

The Justice Patil Committee report faulted the functioning of Maran during his tenure from May 2004 to May 2007.  The report says Maran did not consult the Telecom Commission and ignored the Group of Ministers (GoM) while taking crucial policy decisions.

“Actions during Mr Maran’s tenure fell foul of the procedures laid down in the government of India (Transactions of Business) Rules, which stipulate that when a policy has any financial bearing, no orders shall be issued without the concurrence of the finance ministry. The minister deviated from 'extant policy' by not discussing the issue of determining the entry fee for telecom licence with the finance ministry,’’ the report reads.

It’s another matter, that neither P Chidambaram, the then finance minister, and the PMO, enforced the same business transaction rules. Maran, like his successor Raja, effectively ran his own spectrum policy by violating the business transaction rules.

His sins may be catching up on him now.

Updated Date:

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