New Delhi: The scandal-scarred United Progressive Alliance (UPA) suffered a fresh setback on Monday, after twin blows by the Central Bureau of Investigation (CBI), the federal investigating agency.
The agency arrested senior Congress leader Suresh Kalmadi for alleged misdemeanours in the conduct of the Commonwealth Games (CWG). It also chargesheeted alliance partner Dravida Munnetra Kazhagam (DMK) chief’s daughter K. Kanimozhi for allegedly conspiring to route bribes paid in the allocation of second-generation (2G) telecom licences, a case in which its actions are being supervised by the Supreme Court.
While Kalmadi will be produced before a magistrate on Tuesday for CBI remand, Kanimozhi, along with two others, will have to appear before the special court trying the 2G cases on 6 May. The two others are Sharad Kumar, managing director (MD) of Kalaignar TV, and Karim Morani, MD of Cineyug Films Pvt. Ltd.
Asif Balwa and Rajeev Agarwal of Kusegaon Realty Pvt. Ltd, named by CBI in its first supplementary chargesheet filed on Monday, have to appear on Tuesday.
However, Dayalu Ammal, wife of M. Karunanidhi and stepmother of Kanimozhi, who holds 60% of Kalaignar TV, has been spared in the chargesheet. CBI accepted her submission to the company board that given her age and her inability to understand any language other than Tamil, her role was limited to meeting the legal requirement for a quorum.
Former telecom minister A. Raja, also of the DMK and already in judicial custody for his alleged role in the 2G scam, has been named in the second chargesheet as well on additional counts.
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CBI’s actions came after the conclusion of voting for the Tamil Nadu assembly on 13 April. Of the three other states, voting in Kerala and Assam too have concluded, while the final phase of the key election in West Bengal will be on 10 May.
While political observers believe that CBI’s actions would give fresh wind to the ongoing debate over corruption in public office, some argue that the UPA could claim ownership of CBI’s actions and thereby make a case of being proactive on tackling corruption.
CBI’s move to chargesheet Kanimozhi in the 2G scam is likely to strain the Congress’ ties with its second biggest ally in the Lok Sabha. However, Congress sought to counter such fears. “Political alliances are based on political realities and not based on allegations... Congress and DMK continue to be allies,” Congress spokesperson Manish Tewari said. The DMK, which has 18 members in the Lower House of Parliament and five ministers in Prime Minister Manmohan Singh’s council, is to meet on 27 April to discuss further course of action.
“If the DMK is defeated or even scrapes through without a clear majority on its own, the Congress will be able to manage the situation. We will be in a comfortable position if we manage to win Kerala and Assam (where the party is dominating the coalition),” said a Congress minister who did not want to be identified. The party leaders also fear that a landslide victory for another crucial ally, the Trinamool Congress, with which it is fighting assembly polls in West Bengal, might also “cost it its bargaining power”.
According to the chargesheet, alleged kickbacks from the allocation of telecom licences were routed by DB Realty—promoted by Shahid Balwa, who also owns Swan Telecom Pvt. Ltd that is now known as Etisalat DB—through associate companies to Kalaignar TV in the form of a series of loans. The transaction records submitted in the chargesheet show most of the money transfers happened almost on the same day.
CBI claimed that around Rs 200 crore was paid by Dynamix Realty, a firm promoted by Shahid Balwa to Kalaignar TV through Kusegaon Fruits and Vegetable Pvt. Ltd and Cineyug Films. The agency said the transaction “was not a genuine business transaction, but in nature of illegal gratification paid in lieu of the UAS (unified access service) licences, valuable spectrum and other undue benefits given by accused public servants to M/s Swan Telecom Pvt. Ltd (the company promoted by Balwa-owned DB Group that had been allocated telecom licence in 2008)”.
The chargesheet said the transactions were made in various tranches between December 2008 and August 2009, and later on the amount was paid back to DB Realty by Kalaignar TV through the same intermediaries on 24 December 2010, the day Raja was summoned by CBI during the investigation. The entire Rs 200 crore was paid during December to 3 February, it said. Raja was arrested on 2 February.
While Congress claimed that the developments reaffirmed its commitment to fight corruption, the opposition Bharatiya Janata Party (BJP) and the Communist Party of India (Marxist) said it was long delayed. BJP national general secretary Ravi Shankar Prasad told reporters in Lucknow, “Kalmadi’s arrest is a right step taken belatedly... But why only Kalmadi? All those responsible and involved in the Rs 70,000 crore scam should be brought to book and punished.”
Within hours of his arrest, the Congress party suspended Kalmadi, who is also the president of the Indian Olympic Association (IOA), from the party. Sports minister Ajay Maken told reporters in the national capital that IOA will be asked to elect a new president.
It’s not in the national interest that someone who’s in jail or has been chargesheeted “should represent the country any more. As soon as official confirmation of his arrest comes, we are going to request the IOA to elect someone”, Maken said. Kalmadi was earlier sacked as chairman of the CWG organizing committee (OC), following sustained political pressure from the opposition.
CBI alleged that officials of OC had conspired with representatives of a Swiss firm and that the contract for timing, scoring and results was awarded by wrongfully restricting and eliminating competition from other suppliers in a premeditated and planned manner with the deal agreed at an inflated cost of Rs 141 crore, said Dharini Mishra, a spokeswoman for CBI. The agency, however, did not name the firm. “Wrongful loss of approximately Rs 95 crore was caused to the public exchequer,” she said.
CBI is now also planning to question Kalmadi in two earlier cases of corruption, fraud and criminal conspiracy related to financial irregularities during the Queen’s Baton Relay held in London in October 2009, ahead of the Games. It has already arrested his close aides, including then OC joint director general T.S. Darbari, deputy director general Sanjay Mohindroo and treasurer M. Jayachandran in that case.
“The developments (CBI actions) will bring the issue of corruption back to the limelight,” said Balveer Arora, former head of the political science department at Jawaharlal Nehru University. “But with the uncompromising attitude towards the corrupt personalities and its compromising with (right activist) Anna Hazare’s agitation for anti-graft Bill, the government is looking for a long-term advantage. They want action against corruption to overshadow the act of corruption.”
Graphic by Sandeep Bhatnagar/Mint
Sahil Makkar, Anuja, Shauvik Ghosh and Anupama Chandrasekaran of Mint and PTI contributed to this story.