Saturday, February 4, 2012

Trial Court delivers body blow to BJP; gives hint of where verdict is going

It’s not just the fact that the trial court summarily dismissed what was always a political case filed by the “mukhota” called Subramaniam Swami on behalf of the BJP, but the way in which it provided its justification for doing so that makes the order so special. What I find personally gratifying is that many of the arguments used by Justice Saini have also been used by me in my various posts in the past. Let’s look at each such argument carefully.

The trial court has accepted that Chidambaram was consulted in the decision to give spectrum free and in allowing DB and Unitech to offload equity after winning the license. Justice Saini has then said that these acts are not criminal per se; exactly what I have been saying for some time now. The judge’s ratification of my point of view indicates that giving spectrum free is not necessarily a criminal act. In other words it can be a valid government policy and the government was not necessarily wrong in making the policy. It could be considered wrong only if the intention of the government in formulating the policy was to cream off money from it. That doesn’t appear to be the case; nothing suggests that anyone has made any money from the policy (except for Raja who is suspected of having gained from a mere Rs 200 crore payment made by DB to Kalaignar TV). The benefits of free spectrum have been passed on to consumers in the form of cheap pricing. Most telecom companies are making losses or sub-optimal profits considering their investments. And if free spectrum was illegal policy, then even the NDA was equally in on the take.

Another corollary of the confirmation that Chidambaram knew of the free spectrum policy is that the entire cabinet knew of it. Again, this is a point I have made repeatedly. Such an important decision could never have been taken by any minister without taking the whole cabinet into confidence. Of course, there were ministers who didn’t agree with the free spectrum policy. But the PM must have overruled them in the interest of the poor. Today, the Congress is shy of admitting it; worried that the opposition may demand the PM’s ouster. The truth however is that the scam was never in the policy; the scam was in the implementation of the policy which neither Chidambaram nor the PM appear to have known of.

Likewise, diluting equity by issuing fresh equity to new investors is not a criminal act at all. All except the most illiterate in accountancy matters have understood this point. The ignorant Indian junta has been led to believe that there is no difference between diluting and selling. In diluting, the money paid by the one who acquires the equity goes to the company. This money is used in making fresh investments. This is how lacs of crores of rupees have been invested in the telecom sector. Not a single penny goes to the promoters. In selling, on the other hand, the promoter takes home the cash. That would be profit and opportunistic selling and there could be a case made out of unlawful gains. In this case, both DB and Unitech diluted, not sold, equity. Justice Saini has correctly pointed this out. If his judgment holds in the future, then indeed a large chunk of the Rs 1.76 lac crore scam vanishes. And that’s how it should be.

The trial court has also distinguished between criminal culpability and an inadvertent loss caused to the country or a gain caused to another party. Of course this is true. If this were not to be true, then we would essentially be suggesting that humans are perfect; all their decisions are perfect. That’s ridiculous. Humans make mistakes all the time – I challenge any reader of this post to say that he/she has made no mistakes in life. And if they did make mistakes, they were made because of reasons of corruption. So there is a distinction between honest mistakes and dishonest corrupt deeds. This sounds familiar? Well that’s because the PM said the same thing in the context of people expecting bureaucrats to make all sound decisions. That’s simply not impossible. But no, the BJP would like to make it appear that every inadvertently wrong decision points to corruption when the UPA is in power. Ridiculous. That’s why Justice Saini’s verdict is a good slap on the BJP’s face.

The trial court verdict is a body blow to the BJP and Subramaniam Swami. I wouldn’t want to comment too much on Subramaniam Swami since it is a well known secret that he is acting on behalf of certain political masters (a political damsel maybe?). This particular politician is a known opponent of Chidambaram….having locked horns with him when he won his last LS elections. The other known secret is that Swami is a “mukhota” (mask) of the BJP – fortunately Swami has himself confirmed that he is very keen to join the BJP as soon as it gives him the green signal. That is why the blow to Swami is in reality a blow to the South Indian damsel-puppeteer and to the BJP. Without the prosecution of Chidambaram, the BJP has failed to link the Congress to the 2G scam. It remains a DMK show and unfortunately that won’t count much during the elections (remember all parties fight separately). The BJP’s frustration was writ large on the faces of all its political leaders. No surprises then that Swami has decided to appeal in the HC.

Swami must remember however that even the SC had said pretty much the same thing that the trial court did. In fact, I had written just yesterday that the trial court should follow what the SC has done. “As the minister of C&IT was very much conscious of the fact that the finance secretary had objected to the allocation of 2G spectrum at the rates fixed in 2001, he did not consult the finance minister or the officers of the finance ministry,” the judgment has said. The judges have said all that they wanted to say. Will Justice Saini of the trial court heed this message? He ought to. The SC’s logic was different from Justice Saini’s in so much that the SC said that the Finance Ministry had actually objected to the free spectrum. But the end result was the same. The SC refused to grant Chidambaram’s prosecution. Swami is unlikely to get any relief from the SC when he reaches it again. For now, we will need to wait and see what the HC says.

It’s worth summarizing the facts of the 2G case. Giving spectrum free was not a scam. Allowing winners to dilute (not sell) equity was not a scam. Keeping One Time Entry Fees at 2001 levels is questionable. It could have been increased taking inflation into account. The lead auditor of the CAG RP Singh had estimated this figure to be a loss of some Rs 2500 crores. Even in this case, there doesn’t appear to be any intention to make illicit gains. Giving licenses to real estate companies is not a scam. In the past, companies unconnected with telecom (Reliance, Birlas, Tatas) had all also been allowed to enter the telecom sector. The real scam was in the way Raja changed the rules of the First Come First Served (FCFS) policy to suit a few bidders. That was the scam. Did he make money? Perhaps as the DB – Kalaignar TV connection suggests. Is there any direct connection established between Unitech and Raja? None at all.

The real truth is that an aggressive opposition with no regard to national interests – accompanied by an overzealous and must-make-a-name-for-myself CAG conspired to attack the Congress to gain political mileage. As usual, the rather illiterate media in our country amplified the conspiracy without as much as bothering to understand the issues. Media focused on the sensationalism parts – and failed in its duty to establish the truth. That’s why bloggers like me have to write such posts…..

No comments:

Post a Comment