It is estimated that clearance of large tracts under land ceiling law may have lost state government Rs500 crore
The Bombay High Court has suggested that a probe be conducted by the Central Bureau of Investigation (CBI) into the huge number of allegedly fraudulent clearences given for construction on large tracts of land in Pune over the past three decades.
The suggestion by Judges BH Marlapalle and UD Salvi was made during the hearing of a public interest petition on this issue by Bharatiya Janata Party Maharashtra spokesperson Madhav Bhandari yesterday.
"There are 245 (such) fraud orders which have made this land scam possible. The whole bureaucracy is involved, and the government knows about it. It is high time a step is taken against the corrupt people," Mr Bhandari said today.
The issue involves the grant of no-objection certificates by the government to landholders who own more than 500 square metres. Under the now defunct Urban Land Ceiling Act (repealed in 2007), any construction on an area of above 500 sq m required a clearance from the state government. Such projects were to be regularised only after the landholder agreed to cede 5% of the land to the state government for housing the poor.
However, hundreds of projects were cleared and lakhs of square metres of land that could have been got for housing the poor was used for private projects yielding huge profits. This phenomena was detected by an additional collector in 2005, and some 29 such fraudulent cases were revealed. An inquiry by the CID, subsequently, did not make much headway.
This is when the BJP filed a public interest petition contending that large tracts of land in Pune had been declared as "non-surplus" through fraudulent orders and were exempted from surrendering to the government.
BJP spokesperson Mr Bhandari alleged that former chief minister Vilasrao Deshmukh and the then deputy chief minister RR Patil were instrumental in stopping the CID inquiry into this matter.
"Why was there no investigation?" Mr Bhandari asked, during a telephone conversation with Moneylife. "The government has tried to whitewash the issue. Mr Deshmukh fined an official-whom he knew quite well-but penalising someone is hardly a remedy. That is just regularising the crime."
Labelling this matter as a "mini 2G" scam, the High Court judges remarked that the Pune land affair-estimated at over Rs500 crore-was far worse than the Adarsh society case.
In one of the cases that was investigated in 2005, one of the beneficiaries had to pay a fine of about Rs8 crore. "If the penalty from one accused could get the state exchequer Rs8 crore, the more than 300 files awaiting scrutiny by the state CID can yield a lot of money for the state coffers," the petition said.
"The very fact that the Court has suggested a CBI inquiry explains how concerned the judiciary is about this matter," Mr Bhandari said. "What is required is that the culprits and the ministers who put a stop to the investigation must be hauled up."
Such cases are only worsening the already sullied image of the real estate business. Pankaj Kapoor, managing director, Liases Foras, a realty research firm, said, "We are seeing a high level of irregularities in the real estate sector. The sector has been one area which is quite common in all kinds of scams. Real estate companies are involved even in the 2G scam."
Mr Kapoor stressed that "the government should become more accountable now and come forward to regularise the (real estate) sector as these kind of scams put urbanisation and the real estate market off balance."
With the arrest of Shahid Usman Balwa, promoter of Swan, the focus of CBI is now on officials of Unitech who had been instrumental in getting the Unified Access Licenses (UAS) during September 2007 and January 2008
Mumbai: Swan Telecom and Unitech Telecom had together caused a loss of over Rs7,000 crore to government exchequer as both had offloaded their shares for hefty sums after getting the second generation (2G) spectrum, alleges the Central Bureau of Investigation (CBI).
With the arrest of Shahid Usman Balwa, promoter of Swan, the focus of CBI is now on officials of Unitech who had been instrumental in getting the Unified Access Licenses (UAS) during September 2007 and January 2008, reports PTI.
In a five-page first information report (FIR), CBI charged the officials of the Department of Telecom (DoT) and some private companies entered into a criminal conspiracy and caused wrongful gains to themselves.
It said Unitech was allotted UAS licenses for 22 circles for Rs1,658 crore. "It offloaded its 60% of shares in the licenses to Telenor of Norway for Rs 6,100 crore even before the roll-out," the FIR said.
Similarly, Swan was allotted UAS licenses for 13 circles for Rs1,537 crore and it sold 45% of shares before roll-out to UAE-based Etisalat for Rs4,200 crore.
"The estimated loss to the government by grant of licences to these two companies alone comes to Rs7,105 crore.
On a pro-rata basis, the estimated loss for all the 122 circles is more than Rs22,000 crore," the FIR said.
It said the licenses were issued at a very nominal rate based on prices fixed in the year 2001.
"As per the information received, all this was done in criminal conspiracy between DoT officials and private companies in order to award licenses to the company for a heavy consideration by putting a cap on the number of applicants against recommendation of TRAI and by awarding licenses to private companies on first-come-first-serve basis on the rates of 2001 without competitive bidding," the FIR said.
The market regulator routinely collects call data of individuals it is investigating. It took the persistent efforts of an RTI activist to ferret out the fact that SEBI had collected records of a massive 2,327 subscribers, although it is legally not authorised to do so
The Securities and Exchange Board of India's (SEBI) celebrated investigation into the Pyramid Saimira scam was the starting point of the regulator seeking call records of people it is investigating.
At a time when industrialist Ratan Tata has approached the Supreme Court (SC) demanding protection of privacy and when the government has admitted that it is duty bound to protect conversations obtained through phone tapping, it is pertinent to know that government agencies such as SEBI have been routinely demanding call data without authorisation. Worse, most telecom operators have been supplying information without even knowing the facts.
In the landmark case of the People's Union for Civil Liberties versus the government, the SC ensured that the Department of Telecommunications (DoT) explicitly designate the agencies that can obtain telephone data. This includes the director general (DG) of police or commissioner of police at the state level and eight national agencies-the Intelligence Bureau, DG-Narcotics Control Bureau, DG-Directorate of Enforcement (ED), DG-Central Economic Intelligence Bureau, DG-Directorate of Revenue Intelligence, Director of Central Bureau of Investigation (CBI), DG-National Investigation Agency (NIA), Member (Investigation)-Central Board of Direct Taxes and Directorate of Signal Intelligence, Ministry of Defence (for J&K, North East and Assam areas only). SEBI is not on the list and has been trying hard to be included.
The DoT, in a letter, dated 10 December 2009 (a copy of which is available with Moneylife), clearly said that SEBI is not an authorised enforcement agency for intercepting or monitoring calls. P Chidambaram too had turned down SEBI's request when he was the finance minister.
Yet, in the Pyramid Saimira case, the market regulator sought records of several entities only to learn, long after its first report, that a SEBI manager had forged a letter (at the behest of a former promoter of the company), which caused wild fluctuations in the stock price and triggered a massive investigation that has killed the company.
The story gets even more curious when a Right to Information (RTI) activist filed a query in August 2010 seeking information on the total number of telephone/mobile connections in respect of which information was sought from service providers. SEBI's first reaction was to reject the request on the grounds that it would hamper ongoing investigations.
The RTI activist filed an appeal in November 2010, saying that he had not asked for specifics, but only the total number of cases in which information had been sought. When the appeal was allowed, SEBI responded on 7 December 2010 saying that it has sought call records for a total of 13 numbers, of which call records for five had not been received from the service provider.
Refusing to believe that the number was so tiny, the RTI activist filed a second query on 20th December. This time he asked for file notings/green notes of various SEBI divisions dealing with the issue.
All of a sudden, on 21st December, SEBI sent another reply giving point-wise additional information, which says it has been collecting call record data of about 2,327 subscribers. In effect, just 14 days later, the market regulator reported that there were not 13 but 2,327 subscribers whose call records had been sought. Of these, 1,774 records were sought by simply writing a letter to telecom operators. We learn that SEBI often seeks information without even initiating a formal investigation. In addition, it has authorised fairly junior officials to deal with the telecom companies.
This raises a lot of questions. Giving wrong information under the RTI Act is a serious offence. In this case, SEBI provided the information in a letter dated 21st December saying that "in continuance" of its earlier letter with false and incomplete data (that it sought only 13 telephone records), it was providing "point-wise additional information" with regard to the query. Would this information have been provided if the RTI applicant had not filed a follow-on query seeking green notes and file notings? Was SEBI trying to fudge facts? Clearly, the benefit of doubt does not go to the regulator. It also introduces a new element of how the regulator tries to fudge facts to hide the fact that it is seeking unauthorised data.
The questions now is whether the government will legitimise SEBI's actions or stop it from seeking such information.