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2G scam | Setback to govt as CBI targets Maran

2G scam | Setback to govt as CBI targets Maran
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First Published: Thu, Jul 07 2011. 01 15 AM IST

Updated: Thu, Jul 07 2011. 10 15 AM IST
New Delhi: Submissions by India’s federal investigation agency that former telecom minister Dayanidhi Maran misused his position and that irregularities in the issue of second-generation (2G) telecom licences and spectrum in 2008 could extend to the ministry of corporate affairs (MCA) may lead to fresh trouble for the beleaguered government.
Expectations are that Maran, currently the minister of textiles and a member of the Dravida Munnetra Kazhagam (DMK), a key ally of the Congress in the United Progressive Alliance (UPA), may quit the cabinet ahead of a planned shuffle in ministerial portfolios, according to one person familiar with the matter, who did not want to be identified.
Tamil Nadu’s chief minister J. Jayalalithaa, who belongs to the All India Anna Dravida Munnetra Kazhagam, the DMK’s arch rival, has already demanded that Prime Minister Manmohan Singh drop Maran from the cabinet. “There is no use in expecting Dayanidhi Maran to take moral responsibility and resign. It is high time the Prime Minister dropped him from the Union council of ministers,” she told reporters after a meeting with Planning Commission deputy chairman Montek Singh Ahluwalia in the national capital.
Communist Party of India national secretary D. Raja echoed that sentiment and said Maran’s position in the government had become “untenable”.
Maran, who has previously denied charges that he forced C. Sivasankaran, then owner of telecom firm Aircel, to sell his stake in the telco to Malaysia’s Maxis Group in return for an investment by the Malaysian company’s affiliate in a venture of the Sun TV group promoted by his family, could not immediately be reached for comment.
DMK’s A. Raja, who succeeded Maran in the telecom ministry, has been in jail since February on charges of irregularities in the 2008 allocation of spectrum and licences. And parliamentarian K. Kanimozhi, daughter of DMK’s chief and former Tamil Nadu chief minister M. Karunanidhi, is also in jail.
The Central Bureau of Investigation (CBI), which submitted a 71-page status report on the so-called 2G scam to the Supreme Court, said that Maran had forced Sivasankaran to sell his stake. Sivasankaran, an ace arbitrageur and first-generation entrepreneur who spends most of his time outside India, had voluntarily appeared before the agency and told his side of the story.
Senior advocate K.K. Venugopal, who read the status report before a bench of justice G.S. Singhvi and justice A.K. Ganguly, did not take Maran’s name, but referred to the telecom minister at that time, and stated that Aircel wasn’t granted key licences for two years. The allegation is that this delay was a pressure tactic meant to force Sivasankaran to give in and sell his stake to Maxis.
The Centre for Public Interest Litigation, a non-governmental organization activist group, had earlier alleged that the Malaysian firm, which was granted these licences within six months after taking over Aircel in December 2006, took a 20% equity in Sun Direct, promoted by Maran’s brother Kalanithi Maran.
CBI’s report also cast aspersions on MCA because it did a “somersault” on the clearance it gave to one company being probed by the agency in the 2G case. One of the companies that got telecom licences violated the rules because it was an associate of a telco. Although this issue was raised by the Registrar of Companies (RoC) in Mumbai at the time, MCA said there was nothing irregular about the company’s ownership. “RoC, Mumbai had concluded that the company was an associate (of a telco). Then this group issued large publicity in the print and electronic media that it had nothing to do with licencee. This is an attempt to pre-empt the aforesaid acts,” Venugopal said.
Justice Singhvi also pointed out the role of banks that loaned money to companies under the scanner that pledged their telecom licences in return. Mint reported the role of banks in the 2G controversy in reports dated 17 December and 21 February. CBI told the court that it would file its next chargesheet in which it is likely to mention the role of MCA and the banks, on 31 August.
CBI’s indictment of Maran is expected to deal a fresh blow to the UPA’s image. The government has been embroiled in a rash of scams and has been criticized for its failure to crack down on corruption and combat high inflation rates.
The government being under perennial siege has resulted in a policy paralysis. Expectations are that the forthcoming monsoon session of Parliament, due to start on 1 August, will be disrupted by a hostile opposition. The government was hoping to push through several legislations in the session.
CBI’s charges and demands for Maran’s resignation could fracture the already weakened relationship between the Congress and the DMK; the latter has already expressed its displeasure over Raja and Kanimozhi being jailed and then denied bail. Congress spokesperson Manish Tewari refused to comment on whether CBI’s report would affect the ties between the Congress and the Tamil Nadu ally. DMK’s T.K.S. Elangovan, a senior Lok Sabha member, said in Chennai: “When the CBI says something, why do you blame the Congress? For every simple thing if you connect it to Congress what can we do? Presently there is an observation on Maran by the CBI about which I have to consult my leader before coming out with a comment.”
Gnani Sankaran, Chennai-based political analyst, said the DMK is not in a position to pull out of the UPA, but “it can embarrass the Prime Minister by seeking replacement for Raja and Maran, who will anyway be dropped”.
liz.m@livemint.com
Elizabeth Roche in New Delhi and Anupama Chandrasekaran in Chennai, and PTI contributed to this story.
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First Published: Thu, Jul 07 2011. 01 15 AM IST
More Topics: 2G scam | 2G news | Dayanidhi Maran | Law | SC |