Sun TV dived over 30%, SpiceJet dropped more than 13% after Centre for Public Interest Litigation files petition on the basis of Tehelka report that Maran favoured Aircel when he was telecom minister, in ‘quid pro quo’
Shares in Sun TV and the budget carrier SpiceJet plunged by over 30% and 13% respectively in trading at around noon today, following reports that a public lawsuit named Dayanidhi Maran, the former telecom minister and now textiles minister and brother of the chairman of the companies, in a telecom probe.
According to the report, the Centre for Public Interest Litigation (CPIL), which has helped drive the investigations into the 2G, moved the Supreme Court yesterday, to demand an inquiry by the Central Bureau of Investigation into allegations that Mr Maran granted licences to Aircel when he was telecom minister on the basis of a "quid pro quo".
The shares of the Maran family-owned Sun TV Networks, which opened lower in a weak market, crashed to Rs260 at around noon, sharply down from its Wednesday close of Rs377. Shares in SpiceJet, which is also owned and run by Dayanidhi's brother Kalanithi Maran, suffered a similar fate and after opening at Rs40.45, dropped to Rs35.55.
These companies are just two of several companies that have had a question mark hanging over them for some time now, because of some cases that have been initiated against their owners or directors for alleged manipulation of the system through bribes.
A new petition filed by CPIL through advocate Prashant Bhushan, said, Tehelka magazine, in its 4 June 2011 issue, had published a cover story in which "a serious case has been made out against" Mr Maran during the time he was telecom minister between 23 May 2004 and 15 May 2007.
In November 2006, the Department of Telecommunication (DoT) issued 14 letters of intent to Aircel, and all of them were converted into licences in December 2006. "Within three months of this," Tehelka said, "Mr Maran's family-owned business (Sun TV) received substantial investment from Maxis Group (which owns Aircel) by taking a 20% equity in Sun Direct. The FIPB approved this investment on 2 March and 19 March 2007. Maxis Group invested a total of Rs599.01 crore in Sun Direct between December 2007 and December 2009."
Also, Astro, a Maxis Group company, through its wholly owned company South Asia Multimedia Technologies, made an investment of Rs11.28 crore in South Asia FM Ltd (SAFL), an radio company owned by the Maran group, which had licences to own and operate 23 FM radio stations in India. These transactions show a clear quid pro quo for getting the UAS licences by Malaysia-based Maxis Group, Tehelka alleged.
Dayanidhi Maran has denied these charges. Two other key leaders of the DMK, which is a partner in the Congress-led alliance government in Delhi, have been arrested and are in custody charged in a multi-crore telecom corruption scandal.
Among the companies that have been named in the bribes-for-licences-and-spectrum case are Reliance Communications (RCom), Unitech and DB Realty and some officials of these firms have also been arrested and are under investigation.
The stocks of these companies have been volatile over the past six months, mainly because of the corruption cases. DB Realty has lost the most, dropping nearly 70% from Rs240 early December 2010. RCom has slipped over 30% from Rs141 and Unitech more than 45% from Rs65 in the same period.
According to documents procured by RTI activist Subhash Chandra Agrawal, former sports minister Mani Shankar Aiyer wrote several letters to the Prime Minister, informing him about the methods Mr Kalmadi adopted to collect more funds than sanctioned under different heads. But the letters were practically ignored
Yesterday, we wrote how Suresh Kalmadi, the former chairman of the Organising Committee (OC) of the Commonwealth Games 2010 (CWG), had his way in all matters and how the warning letters Mani Shankar Aiyer, the former minister for youth affairs and sports, wrote to the prime minister were ignored. According to documents procured by Subhash Chandra Agrawal, using the Right to Information (RTI) Act, Mr Aiyer, in his letters to the PM, specifically wrote about Mr Kalmadi's method of inflating budgets and extracting funds under various labels from the union and state governments.
In a letter to the prime minister on 8 March 2007, Mr Aiyer wrote, "He (Kalmadi) was initially sanctioned the Rs2 crore which he had asked for. He has already supplemented this with a further sum of Rs3 crore from CM, NCT Delhi. He is now seeking a further sum of Rs3 crore from the Government of NCT Delhi. He wants us to top it up with another Rs2 crore from the Government of India (GoI), making a total of Rs10 crore. Thus against his initial projection of a requirement of Rs2 crore on pre-bid expenditure, he has upped the ante to five times the initial figure. This is of a pattern with everything else connected with his involvement in mega sports events."
This shows how Mr Kalmadi was collecting funds from both the government of NCT Delhi and the union government. Mr Kalmadi cited increasing competition from other countries, especially Korea, to bid for the upcoming Asian Games 2014. Mr Aiyer said, "He (Kalmadi) was unable to give me any details of how he has spent or proposes to spend the additional Rs8 crore he has sought, or is seeking to push our bid through. I told him that in all my four decades of experience as a diplomat, I could not recall such large sums of money being spent on pre-bid exercises."
This was not the only instance where Mr Kalmadi inflated the projected figures. He did this again for a project to provide special training for talented Indian athletes through the Sports Authority of India (SAI). In the same letter addressed to the prime minister, Mr Aiyer wrote: "I also found that as against SAI's estimate that about Rs300 crore would be required for the special training of talented athletes, to increase our medal tally at the Commonwealth Games 2010, Kalmadi's projection has now been raised from Rs1,000 crore to Rs1,500 crore! Once again, there is no detailed justification."
Similarly, according to other documents procured by Mr Agrawal through an RTI application, the estimated budget for the international zone, games village and sports infrastructure was Rs325 crore with a provision of plus or minus 25%. However, it was shown as Rs770 crore, a whopping increase of 137%, in an undated current estimate file.
Mr Aiyer forwarded a detailed analysis of the financial, environmental and social costs of organising mega sports events like the CWG and the proposed Formula One Grand Prix, prepared by Anorbotto (Dunu) Roy, director of Delhi-based Hazards Centre. The former sports minister also forwarded an analytical note prepared by the then sports secretary, SK Arora, to the prime minister. Shaleen Kabra, then director at the prime minister's office (PMO) prepared a note on the analysis of Mr Roy and Mr Arora.
The note, written on 31 October 2007, says: "The whole issue of Commonwealth Games cost and benefits is repeatedly coming in focus due to serious differences between the (Sports) Ministry and the Organising Committee-while the Ministry insists on transparency and accountability, the OC wants to preserve its fiefdom. The latest letters of the Minister of Y&S (Aiyer), one suggesting some alternatives and another one suggesting a Minister for State for the purpose, are relevant in this context. The Cabinet Secretariat had reported resolution of the issues but that is not so."
However, on the same day, Sanjay Mitra, joint secretary in the PMO, put a remark on the note, which reads, "No further action is required on this."
Mr Kalmadi had his way in other things as well. Through the intervention of the prime minister, Mr Kalmadi successfully included his man as permanent special invitee in the Committee of Secretaries (COS) set up for the implementation of decisions related to organisation of CWG. He also kept the sports secretary, who was member of the executive board of the OC, away from the board meeting.
While the sports ministry was of the opinion that the OC of CWG, as a public authority falls under the purview of the RTI Act, and had asked the OC to appoint a Central Public Information Office and an Appellate Authority, ignoring the advice of the ministry, the OC filed a petition before the Delhi High Court.
In a letter dated 19 March 2008, Mr Aiyer informed the PMO about the incident about declaring the OC as a public authority under the RTI Act, citing advice from the Department of Legal Affairs, Ministry of Law and Justice. The note written by a private secretary at the PMO reads: "Discussed with PM. No further action seems required in PMO at this stage."
(This is the concluding part of a two-part series. Read the first part: "Kalmadi's 'Cartoons': How Mani Shankar's red flags in 2007 about Kalmadi's dictatorship in CWG were ignored - I"
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