One terse sentence brought a chapter of the 2G spectrum scam to an end at 3 pm this afternoon. An officer of the Central Bureau of Investigation (CBI) told former telecommunications minister Andimuthu Raja, “Mr Raja, you are under arrest,” after four hours of questioning for the fourth time this month.
Raja’s arrest followed the interrogation of his brother, A K Perumal, about the funding of some front organisations owned by telecom companies, which had been issued 2G licences between October 2007 and January 2008.
Raja’s former personal secretary, R K Chandolia, and former telecom secretary Siddharth Behura were also arrested for allegedly abusing their official positions and manipulating tendering procedures to benefit certain telecom companies.
As Raja belongs to the Dravida Munnetra Kazhagam (DMK), an ally of the ruling United Progressive Alliance (UPA), and contributes 18 MPs out of 40 from Tamil Nadu-Pondicherry, there had been some misgivings in the government that the arrest could impact its stability. The UPA has 259 MPs in a House of 543. If the DMK were to walk out of the government in protest against the arrest of one its MPs, the UPA would slip into a minority.
However, immediately after news of the arrest, DMK chief M Karunanidhi went into a meeting on tenders for the free TV scheme that the state government has launched and barred reporters from the venue. Karunanidhi’s alder son, Azhagiri, who has been critical of the role played by Raja, told associates that he had suggested to his father that Raja be suspended from the party. In response, Raja had been removed from his post as propaganda secretary. But there was no reaction from the party — not even mild condemnation of the Centre’s move.
One reason could be the relationship that the Congress and DMK enjoy in the state. The DMK has 99 MLAs in a House of 235. The Congress, which supports the government from the outside, has a strength of 34. Although the Pattali Makkal Katchi with 18 MLAs now supports the DMK, the Karunanidhi government is sure to fall if the Congress pulls out. Moreover, with Tamil Nadu elections due in a matter of months, the DMK simply cannot afford to rock the boat and would prefer to sacrifice one of its MPs instead.
There were absolutely no reverberations in Chennai after Raja’s arrest: No protests, no demonstrations or rallies. “It is hard for people to understand the finer points of corruption in the allocation of 2G spectrum,” said a Congress party worker.
Raja’s troubles started after he issued 122 new licenses to some nine companies in 2008 at a cost of Rs 1,651 crore each — a price fixed in 2001. Many of the new licensees such as Unitech Group and Swan Telecom sold equity in their telecom ventures at a high premium to the license fee. Swan and Unitech sold 45 per cent and 60 per cent stakes, respectively, to foreign players for around $2 billion.
This issue was taken up by political parties in the Left as well as by the BJP, which alleged that Raja had allowed some companies to make a windfall by coming out with an arbitrary policy for allocating licences and scarce spectrum. They said this money belonged to the government. Raja was also attacked by operators, who said his policy was opaque and that the bidding terms were arbitrarily changed to suit select players.
A report by the comptroller & auditor general (CAG) released in November last year said the allocation of new licences at a price fixed in 2001 resulted in a loss of Rs 1.76 lakh crore to the exchequer, based on the 3G auction price. The report faulted Raja for ignoring advice from the Prime Minister’s Office and the law ministry to consider auctions
The CAG report also said that many of the new licensees did not meet eligibility conditions and therefore should not have been given a licence in the first place.
On the basis of CAG’s testimony as well as other issues, the Opposition Bharatiya Janata Party has been demanding a joint parliamentary committee be set up to look into the spectrum issue and did not allow the winter session of Parliament to function. Now, they say Raja’s arrest has only strengthened their case for a JPC. They have demanded the PM depose before the JPC, a demand the Congress is loath to accept.
Today, the Congress party said Raja’s arrest would not affect DMK-Congress ties in the forthcoming election. M Karunanidhi was in Delhi for seat negotiations with the Congress chief Sonia Gandhi two days ago. The impression in the Congress is that Raja’s arrest would tilt the balance of negotiating advantage in the Congress’s favour.
Congress workers in Tamil Nadu, who have been bearing the cross for being seen as party to DMK corruption, are jubilant. Their forecast is that if state Opposition leader Jayalalithaa and film actor Viajakanth, who has formed his own political party, come together, the DMK will be swept out of power in the upcoming Assembly elections. Their assessment is that the DMK is fighting with its back to the wall
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