November 18, 2011

Raja's 2G note says Chidambaram okayed selling of stakes by Unitech, Swan

P. Chidambaram

An internal note, written by former telecom minister A. Raja to then telecom secretary, which could indict Home Minister P. Chidambaram and draw even Prime Minister Manmohan Singh in the 2G spectrum allocation scam mess, has been accessed by Headlines Today.

In the note, Raja claims that Chidambaram as finance minister gave his nod to the dilution of stake in Unitech and Swan Telecom. It claims that this happened in the presence of the prime minister.

In the letter dated November 5, 2008, Raja wrote: "Since some misleading articles are written in the media about the issuance of new licenses and spectrum allocation, more specifically in the case of Swan Telecom and Unitech Telecom, the matter was discussed with honourable prime minister and honourable finance minister as I observed in a press conference at Chennai."

"In the meeting honourable finance minister clarified that dilution of shares to attract foreign investment for business expansion did not amount to sale of licence and as such these companies did their share dilution as per corporate laws,"
the note says.

At the time of selling stake, both Swan Telecom and Unitech Telecom did not have any assets other then licenses which they had acquired. Both Swan Telecom and Unitech Group were allotted a license each for around Rs.1,600 crore.

Months later, Swan sold 45 per cent of equity to Etisalat for a whopping Rs.4,200 crore. Unitech almost instantly sold 60 per cent of its stake for Rs.6,200 crore to Telenor. Stake sales by these companies at such high prices clearly showed how the government sold licenses at throwaway prices.

The special court had earlier directed the Central Bureau of Investigation (CBI) to provide documents related to "equity dilution" by telecom operators that were allotted telecom licenses in 2008 to Janata Party chief Subramanian Swamy, who also happens to be the main petitioner in the case.

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