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2012-2-18 Reply of PC to Hindu Article

2012-2-18 Reply of PC to Hindu Article

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Published by: Firstpost on Feb 24, 2012
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February 18, 2012
Never any 'agreement' with Raja not to revise entryfee
Union Minister of Home Affairs
P. Chidambaram
responds to thereport “Chidambaram may not be out of 2G thicket yet,” that waspublished in
: Your correspondent appears to have missed the crucial pointthat proceedings under section 200 of the CrPC are
ex- parte
proceedings. In proceedings under section 200 CrPC,at the initial stage, there is no opposite party or defendant.The Judge will examine the complainant and the evidencethat the complainant may produce. Such evidence is usuallyselective, self-serving and only what may support the caseof the complainant. That is what happened in this case too.Nevertheless, the Special Judge found no merit in the complaintand dismissed it. The observations in the order of the SpecialJudge must be understood in the context that the proceedingswere
ex-parte
proceedings. However, since your correspondent has interpreted the order of the Special Judge as well as some other documents, I wish toplace a few facts so that the record will be complete. The two acts attributed to me by the complainant were (i) allegedlyagreeing to non-revision of the entry fee and (ii) allegedlypermitting two companies to issue new shares to foreign investors.The relevant facts are as follows (and they are in the publicdomain): (i) On the
entry fee
charged for the LoIs issued on 10.1.2008, the
 
Supreme Court in its judgment dated 2.2.2012 in WP No.423 of 2010 has concluded that the Department of Telecommunications(DoT) ignored the “
concerns raised from various quarters including the Prime Minister, Ministry of Finance and also some of its ownofficers
.” The Supreme Court has also concluded that “
as theMinister of C&IT was very much conscious of the fact that theSecretary, Finance had objected to the allocation of 2G spectrumat the rates fixed in 2001, he did not consult the Finance Minister or the officers of the Finance Ministry 
.” The Supreme Court hasalso noted that the meeting of the full Telecom Commissionscheduled to be held on 9.1.2008 was postponed by the DoT andthe LoIs were issued on 10.1.2008.
Thus, it will be clear that theLoIs were issued on 10.1.2008 without the knowledge of theMinistry of Finance. 
What happened after 10.1.2008 is a matter of record. After 10.1.2008, notes and discussion papers were exchanged betweenthe Ministry of Finance and the DoT during January to April,2008. These discussion papers reflect the consistent stand of theMinistry of Finance that auction was the best method to discover the price and it was legally possible to do so. However, DoTdeclined to accept this view. Hence, various alternatives wereexplored to raise additional revenue. The final discussion paper that was prepared by Secretary, Finance and Secretary, DoTwas considered at a high-level meeting on 4.7.2008. Decisionstaken at that meeting were the decisions of the government.One of the decisions was to revise and update the entry fee byadopting one of two methods (GDP growth rate or SBI PLR) andto charge the said amount upfront when the licencee applied for additional spectrum. This decision would apply to all licenceeswho had been allocated spectrum up to 31.3.2008, includingthe 122 licencees. The decisions are recorded in the minutesdated 6.7.2008.
Therefore, there was never any “agreement”between the Minister of C&IT and me not to revise the entry
 
fee. On the contrary, a decision was taken by government atthe high-level meeting on 4.7.2008 to revise and update theentry fee. 
(ii) Regarding issue of fresh shares by the two Indian companiesto their foreign investors, the FDI policy allowed up to 49 per cent equity under the automatic route. The records will showthat until I demitted office as Finance Minister on 30.11.2008,the position was that M/s. Telenor had subscribed to new sharesamounting to 33.50 per cent of the equity of the Indian companythrough the automatic route
 
and M/s. Etisalat had subscribedto new shares amounting to 44.73 per cent of the equity of the Indian company through the automatic route. The fundsbrought in by the foreign investors accrued to the companiesand not to the promoters. There was no question of the FinanceMinister “permitting” the Indian companies to issue fresh shares totheir foreign investors.
No such permission was required andno such permission was given. Shalini Singh, Deputy Editor,
The Hindu
, responds:
(i) I am aware that Section 200 CrPC proceedings are ex  parte and no contrary claim has been made by me. The articlecompares Judge Saini's order with Mr. Chidambaram's public statements (obviously made outside the court) and notes how Judge Saini's observation that Mr. Chidambaram “agreed withRaja not to revise or revisit the entry fee or spectrum charge asdiscovered in 2001” runs contrary to Mr. Chidambaram's public  position. As does the Prime Minister's statement in the RajyaSabha on February 24, 2011, which I had also referred to, whereinhe had said: “The two ministers had agreed on this [i.e. pricing of spectrum] because of legacy considerations and I accepted their recommendations.” This is the “agreement” I spoke about when I asked, “If there is indeed an agreement, when was it struck and isit on the files?” 

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