To Chief Vigilance Commissioner New Delhi

A K Agrawal E 13/2 Vijaykiran Apartment 32 Victoria Road Bangalore 560047 15/02/09

Complaint to CVC on telecom scam resulting in a loss of around of Rs 50,000 crore to the exchequer
This complaint is being filed against the Minister and the government officials in the Ministry of telecommunication who were involved in the decision of giving telecom license to Reliance Communication on 18/10/07 and to other companies on 10/1/08 under the first cum first serve policy. The licenses were given at a price that was far below the market price and the booty of the difference was shared.

This complaint is filed by the undersigned and the complainant desires his identity is kept confidential.. The complainant is the author of the book” Reliance the real Natwar” in which he has shown as to how various largesse involving thousands of crores of public money were handed over to Reliance and also established as to how all the institutions of the government including the investigating agencies as also the Parliament are involved in covering up the various scams involving Reliance. A reading of the book and the fact that none of the persons/ companies/ institution named in the book have sued the complainant shows the bonafide of the complainant and that the complainant has only public interest in mind..

The details of the scam are enclosed as annexures. The facts can be verified from the balance sheet of Reliance Communications, the electronic filings of Swan Telecom Pvt Ltd and Tiger Trustee Pvt Ltd available on the web site of Department of Company Affairs and the web site of DOT. ( Department of telecommunication). In case the CVC cannot access them the same can be made available by the complaiant.

In particular the license given to Swan Telecom on 10/1/08 was an original application of Reliance Telecommunication and was traded after the Ministry granting a license to Reliance Communication under another application of the company on 18/10/07.The application of Swan telecom should have been rejected as both ownership and control changed hands after the cut off date for applying but was nevertheless treated as a valid one by the Ministry.

The informant is aware that the Vigilance Commission is seized of the matter and has sought repeated explanation from the concerned Ministry.

However, the informant is reasonably sure that the facts of the deal as analysed from the various documents of the DOT and the filling made by Swan Telecom and Tiger Trustee Pvt Ltd and Reliance Communication ( available on the web site of Dept of Company Affairs) clearly establish that the deal was a corrupt one in which largesse of thousands of crores were given, may not be with the CVC. These facts are, in the opinion of the informant, sufficient to file a FIR under the PCA even after the deletion of section 13 (1) (a) (d)(iii) and the guilty charge-sheeted as the offence has been committed under 13 (1) (a) and 13 (1) (a) (d)(ii).

In the case of Swan Telecom, the following facts are established from the filings made by the concerned company and its holding company, Tiger Trustee on the web site of DOT : The management of both the holding company and the company that it controlled, that is Tiger Trustee Pvt Ltd and Swan Telecom Pvt Ltd, changes on the day DOT notified the cut off date for issuing fresh telecom license-1/10/07. This was a result of quid pro quo arrangement. The announcement of the cut off date as 25/9/07 on 1/8/07 was malafide.

The ownership of the holding company which owned Swan Telecom Pvt Ltd -- Tiger Trustee Pvt Ltd -changes on the day DOT doled out a GSM license to Reliance Communication- 18/10/07.

Anil Ambani voluntarily gave up ownership of the holding company -- Tiger Trustee Pvt Ltd -- which owned 90% of the company which had applied for the license and was about to be allotted a telecom license -- Swan Telecom Pvt Ltd -- by reducing his ownership from 100% to a mere 0.2%.

Anil Ambani gives up ownership of Tiger Trustee Pvt Ltd for a meagre investment of Rs 4.99 crores, to proxies with whom he had struck the deal, when the capital and reserve of the company it owned Swan Telecom Pvt. Ltd was over Rs 1100 crores. The fact that both these events happened on 18/10/07 when Reliance Communication was given a license shows that there was a quid pro arrangement..

The fact that both the management and the ownership of Swan Telecom had changed and the change took place on 18/10/07 made Swan Telecom ineleigible for being considered for a license as the last date for

application was 25/09/09. The application became a new application on 18/10/07 as both the management and the ownership changed by that day. The DOT has wrongly stated in their affidavit before the Delhi High Court that the management and the ownership of Swan Telecom had remained intact. This is not true according to the filings made with the Registrar of Companies.

Reliance Communication ( through its subsidiary ) subscribed to preference shares of Re 1/-, on which 8% interest was to be paid ( with no other benefit like dividend or bonus) at a unheard premium of Rs 999. Preference shares are like fixed deposit which in this case had a fixed return of 8%. The preference shares were overvalued by 999 times or 99900%. The amount invested by Reliance Telecom in the 8% preference shares of Swan Telecom Pvt Ltd was a staggering Rs 992 crores. This investment was made sometimes in Feb or March, at the time Swan Telecom applied for the license. The application for the license was for the circles in which Reliance Communication did not have GSM license. The investment made by Reliance Communication, the persons on the Board of Swan Telecom and the circles for which the license was applied for clearly establish that the license was for and behalf of Reliance Communication and its owner Anil Ambani. ( refer ROC filings of the companies involved).

The first cum first serve policy was in violation of the judgment of the Delhi Court and yet it was the policy adopted in handing over licenses to reliance Communication on 18/10/07 and to various other new applicants on 10/1/08. It was the only manner in which massive largesse could be given.

That the cut off date was announced on 1/10/07 as 25/9/07 establishes the malafide of the decision makers along with the fact that most of the applications from new players were dated 24/07/07 or 25/07/07 which suggests that the information was leaked or the applications were backdated. That most of the applicants who applied on the last day or a day before did not have the prescribed net worth (equity plus reserves) but had taken debt and were therefore ineligible for the license further suggests that the granting of the license was tainted with corruption. It is another matter that most of the applicants were builders, a trade traditionally known for dealing in black money -- while purchasing land and selling built up space -- only confirms the obvious.

The licenses were given at historical cost of Rs 1650 crores for all the circles while the same were valued in the market at Rs 10,000 crores.

The following illegal means have been adopted in obtaining for themselves and other persons who were granted license for pecuniary advantage: Announcing a cut off date for applying after the last date ( on 1/10/07 the cut off date was announced as 25/07/07) to restrict the number of applicants, applying the first cum first serve policy which was declared illegal by Delhi High Court to favour the select few, granting the license at a price far below the market price and causing loss of Rs 50,000 crores, leaking the cut off date resulting in most of the new players applying on the last day or one day prior to the last day, ignoring the fact that most of the applicants did not have the required net worth while giving them the license, ignoring the fact that Reliance had traded the ownership and control of Swan Telecom after the last day for application, filing a false affidavit in Delhi high Court that the ownership and control of Swan Telecom was intact from the time they applied -- 2/3/07 -- for a license, announcing on 10/1/08 that the license would be given on first cum first serve basis and giving the license on the same day so that the same could not be challenged in Court.

Other evidences relate to Anil Ambani’s letter to PMO lobbying for allotment of license to new players at historical cost after Reliance Communication was allotted the license on 18/10/07 (to benefit Swan Telecom), Reliance Communication subscribing to preference shares of Re1 at Rs 1000 and investing Rs 992 crores, change in control of Swan Telecom and Tiger trustee on 1/10/07 when the cut off date for new license was announced by DOT, change in ownership of Swan Telecom and thereby of Swan Telecom on 18/10/07 when Reliance Communication was granted GSM license, the giving up of control of Tiger trustee for a mere Rs 4.99 crores when it controlled Rs 1100 crores (equity plus reserves) in Swan Telecom, and finally the sale of preference shares by Reliance Communication held in Swan Telecom. Who bought 992 crores of Re1/- 8% preference shares at a over valued premium of 99900%? That is the million dollar question to the billion dollar scam. A K Agrawal Bangalore

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