2G scam: How BJP might be caught unawares as CBI probe continues

Last week, when the Central Bureau of Investigation (CBI) named Shyamal Ghosh, the Telecom Secretary during Pramod Mahajan’s reign, in its FIR, it didn’t stir the Bhartiya Janata Party (BJP)’s hornets nest one bit.

Mahajan is already dead and court trials, typically, spare the dead. Sensing a golden opportunity in the forthcoming Parliament session, the unshaken BJP announced its future line of attack: Boycott P Chidambaram in the coming session, till he resigns on account of his role in the 2G scam. Little did they anticipate that the ongoing CBI investigations may prop up names of living BJP leaders, perhaps, even while the winter session is still on.

Last Saturday, the CBI filed its first information report (FIR) and raided the premises of Airtel and Vodafone. The reason: During the BJP-led NDA government in 2002, Mahajan and his telecom secretary Ghosh had conspired to help Airtel (then known as Bharti Cellular) and Vodafone (then known as Hutchison Max) in ‘hoarding of the spectrum’ at the government’s expense.

Even if Mahajan will cause the BJP little worry, the CBI raids and seizure of some documents have put the investigators on a money trail. And this money trail points a finger at Delhi-based BJP leader Mahajan’s close associate Sudhanshu Mittal. The seized documents are under CBI scrutiny and according to sources, the CBI intends to question Sudhanshu Mittal soon in this matter.

Interestingly, Mittal’s name had also figured in the Commonwealth Games (CWG) mess. His nephew Vinay Mittal’s firm, Deepali Design and Exhibits, was allocated a lucrative overlay CWG deal worth over Rs 200 crore. The Income Tax and Enforcement Directorate had conducted a joint raid on Mittal’s house and other premises. Even the CBI had questioned Mittal in the CWG scam.

Mittal is popularly known as ‘tentwallah’ or the man who ran the largest tent business in Delhi. He began his political life as a BJP youth activist and later became the head of the Delhi University Students’ Union. He met Mahajan in the early eighties and since then became his close friend. With Mahajan’s meteoric rise in politics, Mittal’s political stature rose too. He was alleged to have been the money-handler in Mahajan’s matters. This first came to light in 2002, when Mittal’s relative, who owned three Shell companies, was offered Rs one crore Reliance Infocomm shares at Rs 1 each. His relative returned all the shares, when the controversy spiraled and Mahajan then, had engaged in extensive fire-fighting to douse the controversy.

The CBI FIR says that the government lost revenue of Rs 508 crore due to the granting of additional 2G spectrum to Vodafone and Airtel. In simple terms, Vodafone and Airtel had four megahertz spectrum lines and the government used to get two percent revenue on it. Logically, an increase to six megahertz also corresponds to an increase in revenue share for the government. But Mahajan allowed the allocation of additional spectrum up to 10 megahertz to these two companies, which were already leaders in the telecom market. Thus, the CBI alleges, Mahajan rewarded the leaders, who did not require additional spectrum, and then helped them hoard the spectrum at the government’s expense.

Worse, the CBI has a report of the Technical Evaluation Committee of the telecom ministry, which in 2001 had recommended that there was no need to allocate additional spectrum for the next three years. Plus, Ghosh, in his first communication, had asked for an incremental increase in revenue share with a corresponding increase in four megahertz spectrum lines. But later, on 31 January 2002, he revised his communication and issued new instructions at the instance of Mahajan and allocated additional spectrum to Vodafone and Airtel without any change in revenue share.

The entire deal was clinched on a single day – 31 January 2002. The files were not shown to Members (Finance) of the Finance Ministry. The file wasn’t put up to other concerned senior officers and even to the then Minister of State for Telecom. And this mistake of Mahajan was detected by the Telecom Ministry in 2008 and Department of Telecom then course corrected and started charging additional revenue on the additional spectrum.

CBI sources say that there is a money trail in Mahajan’s case. He is dead and thus it will take them some time to get on the track. They suspect that there may be more BJP leaders involved, but Mittal’s name figures at the top of the list of suspects. The only relief, however, for the BJP is that Arun Shourie, another telecom minister during the NDA regime, will walk out unscathed because the CBI has found him clean in his telecom deals.