2G: Fin Min document on PC role placed in SC

New Delhi, Sept 21 (PTI) The Indian Telecom Ministry
could have gone in for auction of 2G spectrum licenses had the
then Finance Minister P Chidambaram insisted on this,
according to a Finance Ministry document submitted to the
Supreme Court on Wednesday.
The March 25, 2011 office memorandum by the Finance
Ministry headed by Pranab Mukherjee sent to the Prime
Minister's Office(PMO) also suggested that Chidambaram and the
jailed former telecom minister A Raja had jointly determined
the price for the 2G spectrum in 2008.
The document was filed by Janata party leader
Subramanian Swamy before a bench of justices G S Singhvi and A
K Ganguly.
The coverning note of the memorandum sent by a Finance
Ministry official DR P G S Rao to the PMO said it was seen by
Mukherjee.
Swamy, who has sought probe against Chidambaram for his
alleged culpability in the price fixation of the spectrum, has
contended that the Chief Bureau of Investigation was only
holding Raja for the loss of revenue to the exchequer in the
spectrum allocation.
Swamy contended that there were four meetings on the
issue of price fixation for the spectrum in which Chidambaram
and Raja sat with the Prime Minister in the final meeting.
The document placed by Swamy stated that a note was sent
by the then Finance Minister (Chidambaram) to the Prime
Minister on January 15, 2008 in which auction of spectrum was
argued but only with the reference to spectrum beyond the
'start up' spectrum.
Further, it said that in a subsequent meeting on January
30, 2008 between Chidambaram and Raja, it was noted by the
then Finance Minister that "he was for now not seeking to
revisit the current regimes for entry fee or revenue shares".
The note also ruled out the option of auctioning
spectrum for various reasons.
The allegations in the 2G spectrum scam was that the
licenses were sold at throwaway prices on a
first-come-first-serve basis based on 2001 price causing a
loss to the exchequer instead of them being auctioned.
The document said though Finance Secretary had
suggested to go for auction for initial spectrum of 4.4 MHz in
early February 2008, "the DoT was not keen to do the same
since it had said that it will disturb the level playing field
and the present Letter of Intent (LoI) holders who had already
paid entry fee were likely to go for litigation".
It said that DoT opined that 4.4 MHz (radio wave for
2G) was a part of licence agreement and initial entry
fee for licence may be construed as the defacto price of
initial spectrum.
"DoT could have invoked clause 5.1 of the UAS license
for cancelling licenses in case MoF(Finance Ministry) had
stuck to the stand of auctioning the 4.4 MHz spectrum. Perhaps
some litigations would have arisen as a consequence," it said.
The document of the Finance Ministry also noted further
meetings were held between Chidambaram and Raja on May 29,
2008 and June, 12, 2008.
"Subsequently in the meeting held under the Chair of
the Prime Minister on July 4, 2008 (as recorded in the note of
the then Finance Secretary dated July 6, 2008,), the then
Finance Minister (Chidambaram) and Minister of
Telecommunications (Raja) agreed to the proposals on
enhancement of spectrum usage charges and pricing of spectrum
based on indexing the base prise (Rs 266 crore per MHz) and
compounding using SBI PLR from existing allottees of spectrum
beyond 6.2 MHz.
However, the issue of revision of entry fee was not
discussed in the meeting," the document said.
The document noted that the former Finance Minister
recommended an auction mechanism for future allocation of
spectrum (beyond the "start up" spectrum) with the spectrum
allocations having been made in the past to be treated as a
closed chapter. The recommendation was in the context of
spectrum usage charges and not with regard to the entry fee.
CAG in its report has said there was a presumtive loss of
Rs 1.76 lakh crore but CBI in its charge sheet calculated the
loss to Rs 30,984 crore.
The bench also remarked on the use of term "alleged"
with the scam.
"Some people still call alleged 2G scam," the bench said.
Venugopal then replied "I call it 2G scam as the charge
sheet has been filed in the case".
The court made the remarks during the hearing of Janata
Party President Subramanian Swamy's plea seeking a CBI probe
against Home Minister P Chidambaram for his alleged
culpability in 2G scam.
Swamy alleged Chidambaram as the then Finance Minister
was party to a conspiracy with Raja in deciding the price for
spectrum, which was contested by CBI and the Centre.
CBI and the Centre opposed Swamy's plea saying it is
beyond the Supreme Court's jurisdiction to decide as the probe
into the multi-crore scam was complete and only the trial
court can entertain such a petition.