Home minister P Chidambaram and telecom minister Kapil Sibal on Monday strongly refuted allegations made by former telecom minister A Raja that the PM and then finance minister Chidambaram had endorsed Unitech and Swan’s decision to rope in foreign partners.
Chidambaram, who was named in Raja’s testimonial in court, said the only issue examined by him as finance minister in 2007 and by the prime minister was if the two new telecom licencees — Swan and Unitech — were divesting, ie selling, their stake or diluting shares through issue of fresh equity.
He also said the telecom ministry consistently wanted the entry fee to remain at 2001-levels but the finance ministry wanted it to be rediscovered through an auction.
Responding to allegations that the two new telecom licencees — Unitech and Swan — divested their equity at premium, Sibal asserted that “there was no disinvestment and it was only dilution of stake by bringing in additional equity”.
Asked whether the PM knew about the dilution of equity by Unitech and Swan, Sibal said, “yes, the prime minister knew that it was dilution of equity” by way of issuing new shares and there was no divestment of promoters’ equity.
Chidambaram declined to comment on Raja’s testimony because he would not comment on a statement reportedly made in court. He said it was found that spectrum was not sold in either of the two cases and foreign partners were inducted by way of issue of fresh shares. “They (Swan Telecom and Unitech) were inducting foreign partners or new partners. They had got spectrum and they had (telecom) licence. They were now inducting new partners. I think, DoT (Department of Telecom) had approved the induction of new partners,” he said.
“The question was whether it was divestment (sale) of promoter’s equity or dilution of equity by issue of fresh shares… This was examined by the ministry of finance. Both were cases of dilution of equity by issue of fresh shares. The prime minister wanted to know if it was a case of dilution of equity or divestment. I do not think there was any sale of spectrum. The spectrum was allocated to the company which got licence and the spectrum remained with the company. The company issued fresh shares,” Chidambaram said.
He added that what was discussed in 2007 was “how did the new partner get inducted. The new partner got inducted by way of fresh equity”.
Asked why no telecom company till date had paid for 2G spectrum since 2001, Chidambaram said, “The companies got start-up spectrum allocated along with the licences. DoT’s stand was that the entry fee should be the same as what was discovered in 2001. The ministry of finance said that the entry fee should be rediscovered through an auction.”
Sibal hit out at the opposition BJP for demanding the PM’s resignation and that of Chidambaram by treating the argument of Raja in the 2G scam case as evidence against the government.
His comments came after BJP president Nitin Gadkari demanded resignation of Singh and Chidambaram stating that what Raja had said in court showed that the top leadership of the government was aware of all 2G transactions.
Sibal told reporters it was “unfortunate” that the president of a national political party like BJP demanded resignation on the basis of arguments made by Raja in court. “He (Gadkari) should have consulted Arun Jaitley (senior BJP leader) or some other lawyer,” he said.